Communication from the Commission - Completing the reform mandate: progress report and measures to be implemented in 2004
Date: 2004-02-10
Institutions: European Commission
Subjects: European Commission, institutional reform, report

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 10.2.2004 
COM(2004) 93 final 

COMMUNICATION FROM THE COMMISSION 

COMPLETING THE REFORM MANDATE: 
PROGRESS REPORT AND MEASURES TO BE IMPLEMENTED IN 2004 

EN 

   EN 

 
 
 
TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

2.5. 

3. 

3.1. 

3.2. 

3.3. 

4. 

4.1. 

4.2. 

4.3. 

Introduction .................................................................................................................. 3 

Progress in Implementing the White Paper.................................................................. 3 

The 98 White Paper actions ......................................................................................... 3 

Creation of a culture based on service ......................................................................... 4 

Strategic Planning and Programming and policy coordination.................................... 5 

Personnel Policy........................................................................................................... 7 

Internal Control and Financial Management.............................................................. 10 

Implementing Reform in 2004 ................................................................................... 12 

Strategic Planning and Programming......................................................................... 12 

Personnel Policy......................................................................................................... 13 

Internal Control and Financial Management.............................................................. 14 

Measures to be taken in the wake of the Eurostat crisis............................................. 14 

Revision of the code of conduct governing relations between Commissioners 
and services ................................................................................................................ 15 

Treatment of and follow-up to allegations relating to fraud, irregularity and 
other reprehensible acts.............................................................................................. 16 

A reinforced framework for communication in the domains of internal control 
and internal audit........................................................................................................ 17 

4.4.  Whistleblowing .......................................................................................................... 18 

5. 

5.1. 

5.2. 

6. 

Monitoring Reform .................................................................................................... 21 

Indicators.................................................................................................................... 21 

Internal Control Systems ............................................................................................ 21 

Summary and Conclusion .......................................................................................... 22 

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1. 

INTRODUCTION 

In January 2003 the Commission adopted a Progress Review of Reform1, which fulfilled the 
mandate given by the White Paper of March 2000 to publish a full review of progress. This 
report demonstrated that in less than three years the Commission had fulfilled the majority of 
commitments made in the White Paper. It showed that the first phase of reform – focussing on 
the  introduction  of  structural  and  procedural  changes  and  the  proposal  of  legislation  –  was 
near  completion  while  the  second  phase  –  consisting  mainly  of  implementation  -  was 
underway.  

It also highlighted the fact that 2003 would be a demanding year for Reform. The entry into 
force of the new Financial Regulation on January 1st required a shift to decentralised controls. 
The implementation of the new staff appraisal system and the pursuit of intensive negotiations 
on the revision of the Staff Regulations imposed a considerable workload and an inevitable 
degree of insecurity on staff. Moreover, it confirmed that Reform is a process of change and 
discovery where new issues are identified through the experience of implementation.  

The present report focuses on the main progress achieved in implementing reform in 2003 and 
the  outlook  for  2004.  It  also  shows  that  Reform  can  succeed  only  if  its  implementation 
continues  with  undiminished  vigour.  With  the  exception  of  the  annexes  to  this  report,  the 
report does not repeat the specific information provided in previous progress reports, because 
virtually all of the 98 White Paper actions are implemented. It therefore deals in more detail 
with  some  of  the  issues  highlighted  in  January  2003  and  the  lessons  learned  from  the 
experience  of  implementing  reform  last  year.  In  particular,  due  to  the  importance  of  the 
dossier  and  its  relationship  with  the  reform  project,  this  report  describes  the  measures  that 
must be taken as a follow-up to events at Eurostat. This report also provides detail about the 
administrative preparations for the forthcoming enlargement. 

The report describes in chapter 2 progress in the implementation of the four strands of Reform 
contained in the White Paper. Chapter 3 contains an outlook for Reform in 2004. Chapter 4 
describes in detail the measures to be taken by the Commission in the wake of the Eurostat 
crisis. 

2. 

PROGRESS IN IMPLEMENTING THE WHITE PAPER 

The March 2000 White Paper structured the Reform initiative into four main pillars: a culture 
based on service, strategic planning and programming, personnel policy, and internal control 
and  internal  audit.  This  chapter  first  provides  an  analysis  of  overall  implementation  of  the 
White Paper actions and subsequently summarises progress made in 2003 in each of the four 
pillars. 

2.1. 

The 98 White Paper actions 

A global assessment of the implementation of the 98 actions (see Annex 1) announced in the 
March  2000  White  Paper  shows  that  the  Commission  has  fulfilled  its  commitment to finish 
the job of implementing the White Paper. The Commission announced in January 2003 that 
87 out of the 98 White Paper actions were completed. 

1 COM(2003)40 final. 

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Of the 11 actions that were incomplete at the beginning of 2003, only two and a half remain 
to be fully completed (see Annex 2). A central invoice register foreseen in Action 11 of the 
White Paper was made available to services, and the action will be completed in the first half 
of 2004 in the framework of the modernisation of the accounting system.2 Also linked to the 
introduction of a modernised accounting system is the contracts database foreseen in Action 
74 of the White Paper, which will also become fully operational during this year. Finally, with 
regard to Action 9, the first component – to propose changes to the EU legislative framework 
allowing use of electronic public procurement and transactions – has been completed, while 
the second component – to review the Commission’s internal practices and encourage use of 
electronic signatures – is not yet fully done.  

2.2. 

Creation of a culture based on service 

As underlined in the last progress report, one of the aims underlying the action plan presented 
in  the  White  Paper  was  to  improve  the  Commission’s  relations  with  the  public  while  at  the 
same time achieving a more service-oriented culture inside the Commission. Good progress 
has been made in both the external and internal fields. 

Responding to the public 

Demonstrable  improvements  to  the  Commission’s  efficiency  in  dealing  with  the  public  and 
concrete steps to increase transparency have already been reported on, and the picture in 2003 
shows  the  Commission  to  be  steadily  improving  its  performance.  For  instance,  the 
Commission’s  ability  to  meet  payment  deadlines  has  continued  to  show  improvements  in 
2003, as the average number of days to make a payment decreased from 54 in 1999 to 43.7 in 
2002 and is now down to 42.9 in 2003. Implementation of the Code of good administrative 
behaviour has further increased the Commission’s ability to respond to the public within the 
set  deadlines:  in  2003  between  80-90%  of  public  mail  was  replied  to  within  the  standard 
deadline,  compared  with  70%  in  2002.  For  the  first  time,  a  detailed  online  directory  of 
Commission services is now available to the general public. 

There has been a strong increase of the number of applications from members of the public 
for  access  to  Commission  documents.  Despite  this  increased  demand,  the  rate  of  positive 
responses remains stable at around two thirds. The Regulation concerning the opening to the 
public of the historical archives of the EC and the EAEC has been amended in order to align it 
with the Regulation regarding public access to documents. The scope of the access Regulation 
has  further  been  extended  to  the  Agencies.  The  public  register,  set  up  in  2002,  now  also 
includes  the  agendas  and  minutes  of  Commission  meetings.  At  the  end  of  2003,  a  new 
register, covering the work of the committees assisting the Commission in decision-making, 
was opened to the public. 

Improving European Governance 

Administrative reform is contributing to the objective of improving European governance. In 
particular,  the  changes  foreseen  in  the  Commission’s  June  2002  Action  Plan  on  Better 
Regulation, e.g. establishing principles and minimum standards for consulting the public, and 
establishing  guidelines  for  the  collection  and  use  of  expert  advice,  have  now  been  detailed 
and  are  progressively  integrated  in  the  working  methods  of  the  Commission3.  Also,  the 

2Work  on  activities  and  the  timetable  necessary  to  fully  integrate  activities  of  Community  Delegations  in  third 

countries is ongoing. 
3 COM(2002) 275 and COM(2002) 278 

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commitment to conduct Impact Assessments for all major legislative and policy initiatives has 
been fully embedded in the Strategic Planning and Programming (SPP) cycle, and the gradual 
implementation has started with the Commission Legislative and Work Programme for 2003. 
The  Commission  has  furthermore  introduced  new  measures  to  improve  the  management  of 
infringements procedures for failure to comply with Community law. These measures will in 
turn  contribute  to  fulfilling  the  Commission's  commitments  under  the  Inter-Institutional 
Agreement on "Better Lawmaking" which was signed in December 2003. 

Simplification of procedures and working methods 

Simplification  of  procedures  and  working  methods  is  inherently  an  on-going  element  of 
reform and has developed beyond what was envisaged in the White Paper. An Interim Action 
Plan  of  12  measures  was  successfully  concluded.  A  major  overhaul  of  the  Commission’s 
Manual of Operating Procedures was also completed in 2003. Moreover, in 2003 three quality 
circles  completed  their  work.  These  cover  ways  of  simplifying  the  rules  on  document 
signature;  the  wider  application  of  service  level  agreements  (SLAs)  between  central 
departments and operational services; and the procedures for welcoming and integrating new 
officials. Work on empowerment rules in the external relations field is ongoing and should be 
completed  shortly.  All  the  relevant  documentation  concerning  simplification  is  made 
available  to  Commission  staff  on  an  internal  website  which  is  also  a  tool  for  feedback  and 
suggestions from staff. 

Highlights in 2003 

•  Payment delays continue to decrease from 54 days in 1999 to 43.7 in 2002 and 

42.9 in 2003. 

•  Positive response rate to public enquires for access to documents remain stable at 

around two thirds despite increase in number of enquiries. 

• 

Impact  assessments  for  policy  proposals  successfully  introduced  as  a  new 
procedure in the Commission. 

•  The  Commission’s  Manual  of  operating  procedures  completely  updated  and  put 

on line in December 2003 

2.3. 

Strategic Planning and Programming and policy coordination 

The functioning of the SPP Cycle 

In 2003 the cycle of Strategic Planning and Programming (SPP) was fully operational for the 
first time and reached its ‘cruising speed’ using consolidated Activity-based management and 
budgeting  tools  developed  from  2002,  year  of  creation  of  the  SPP  function  in  the 
Commission. 

The main achievements in 2003 were the following: 

–  The Annual Policy Strategy (APS) was adopted for the third time. The key challenge of the 
APS  2004  decision  was  to  foresee  the  needs  for  human  resources  within  the  context  of 
enlargement, and to redeploy a substantial number of staff towards the set priorities 

–  The  inter-institutional  aspects  of  the  Commission’s  Annual  Policy  Strategy  process  were 
more  fully  developed.  A  constructive  inter-institutional  dialogue  with  the  European 
Parliament  was  held.  Also,  the  APS  2004  decision  included  a  re-enforced  multi-annual 

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policy dimension which served as a basis for a detailed Commission input into the drafting 
of the Council’s Multiannual Strategic Programme 2004-06. 

–  The  SPP  cycle  has  put  policy  priorities  at  the  heart  of  the  decision-making  process, 
including  resource  allocation.  Managers  are  required  to  focus  on  the  need  to  deliver  on 
priority objectives and to report on achievement and performance. While these are positive 
developments, 2003 also made it clear that work is still needed to further embed SPP in the 
administrative  culture.  It  remains  important  to  strike  the  right  balance  between  new  and 
ongoing  activities.  Delivery  of  the  Commission’s  Legislative  and  Work  Programme  was 
below expectations and must be improved. 

–  The  2004  Budget  was  examined  and  developed  for  the  first  time  in  accordance  with  the 
Activity-Based  Budgeting  nomenclature,  following  the  structure  by  policy  area  and 
activity  used  by  all  Commission’s  services  as  the  reference  structure  of  their  annual 
management plans 

The structure and content of the Annual Management Plans (for 2004) were consolidated and 
simplified in 2003 to focus on the essential elements and functions. An important objective is 
to ensure that proper monitoring of the objectives and activities can be carried out, covering in 
particular  the  follow  up  of  action  plans  identified  in  the  annual  activity  reports  and  the 
corresponding synthesis. 

Policy co-ordinating mechanisms 

The Commission has taken steps to improve co-ordination between its services with the aim 
of  reinforcing  the  central  steer  given  to  the  substance  of  reform-related  policies  and  their 
implementation. 

The  ABM  Steering  Group,  which  is  chaired  by  the  Secretary  General  and  brings  together 
Directors  General  and  cabinets  from  central  services,  coordinates  political  and  strategic 
questions  related  to  Reform.  The  Directors  General  Group  is  responsible  for  ensuring 
consistent  implementation  of  Reform  and  other  policies.  In  addition  to  these  groups,  a 
Commission  decision  in  October 20024  led  to  the  creation  of  two  new  co-ordinating 
structures, the Group of Resource Directors5 and the Interservice Co-ordination Group6. This 
means  that  presently  four  permanent  high-level  interservice  groups  serve  the  purpose  of 
increasing  coherence  and  co-ordination  among  the  services,  facilitating  better  forward 
planning,  providing  a  forum  for  constant  feedback  and  helping  to  reduce  the  workload  for 
services. For more detail on their activities during 2003, please refer to Annex 3. 

4 Communication on Delivering Reform and Improving Interservice Co-ordination, SEC(2002)1040. 
5  “For  the  delivery  of  administrative  reform,  resource  directors  should  be  brought  together  in  a  more  structured  way  to 
discuss the detailed issues that require attention and ensure that the needs of operational services are being taken 
into account.” (SEC(2002) 1040/2, page 1). 

6 “Interservice cooperation on policy implementation should be improved through an intermediate structure to review agenda 
planning, identify issues requiring particular attention and oversee in a co-ordinated way the work of ad-hoc groups 
dealing with specific issues.” (SEC(2002) 1040/2, page 1). 

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Highlights in 2003 

•  The process of gradual introduction of Activity-Based Budgeting comes to an end 

providing a more transparent and easily comprehensible budget. 

•  Consolidated  Activity-Based  Management  tools  for  planning,  monitoring  and 

reporting are now used across Commission services 

•  Coordinating mechanisms in the Commission are streamlined and consolidated in 

four interservice coordination groups. 

2.4. 

Personnel Policy 

As announced in the 2003 Progress Review of Reform, by the end of 2002 the Commission 
had issued comprehensive proposals to modify the Staff Regulations and begun to implement 
actions  that  could  be  carried  out  under  the  existing  regime.  2003  was  therefore  the  crucial 
year  for  implementation  of  the  range  of  personnel  reforms  foreseen  by  the  White  Paper  as 
well  as  intensive  negotiation  of  the  revised  Staff  Regulations.  A  key  challenge  for 
implementation  was  the  first  exercise  of  the  new  staff  appraisal  and  promotion  system. 
Negotiations  paved  the  way  for  entry  into  force  of  the  new  Staff  Regulations  on  1st  May 
2004,  which  are  now  in  the  final  stages  of  the  legislative  procedure  in  the  Council  and 
European Parliament. Their adoption will complete the picture of personnel reform allowing 
the coherent human resource policy developed during the reform process to take full effect. 
Taking  place  at  the  same  time  as  the  historic  forthcoming  enlargement,  this  will  allow  the 
Commission to recruit new colleagues into a stable framework of modernised rules including 
a new, more linear career structure. 

Staff Regulations 

Negotiations on the revised Staff Regulations saw the achievement of a major breakthrough in 
2003:  political  agreement  was  reached  in  the  Council  on  19th  May  on  an  overall  package 
focusing  on  pay,  pensions  and  careers,  and  establishing  the  target  date  of  1st  May  2004  for 
entry  into  force  of  the  new  Staff  Regulations.  Following  this,  several  other  important 
milestones were achieved. It was possible to launch a dialogue between staff representatives, 
Member States and the administrations of all the Institutions, in the format of the Consultation 
Committee (CoCo). The CoCo conclusions were adopted by the Council on 29th September, 
which modified and added to the political agreement. This landmark was key to moving the 
dossier forward in line with the agreed timetable and in the framework of peaceful working 
relations  and  social  dialogue.  The  Commission  adopted  its  revised  proposal  to  modify  the 
Staff Regulations on 18th November and forwarded it to the Council, translating the outcome 
of  the  negotiations  to  date.  Agreement  was  reached  in  January  2004  with  the  European 
Parliament  regarding  their  priority  issues,  which  should  allow  the  Parliament  to  deliver  its 
opinion  on  the  final  package  within  the  agreed  timetable.  This  signalled  the  end  of 
negotiations  on  substance  and  initiated  a  process  of  verification  by  the  Council  and  other 
Institutions, which needs to be finalised in early 2004.  

The  revised  proposal  remains  close  to  the  original  proposal  of  April  2002.  The  more  linear 
career structure has been safeguarded in its original form, upholding the aim of strengthening 
the  principle  of  merit  in  the  Institutions.  Salaries  remain  at  an  appropriate  level,  while  a 

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modernisation of the existing pension system was agreed to respond to the problem of ageing 
populations  in  Europe.  Working  conditions  will  be  modernised  as  proposed  by  the 
Commission,  to  ensure  greater  flexibility  and  equal  opportunities,  while  new  measures  on 
discipline and whistleblowing were agreed to ensure high ethical standards and provide clear 
rules in all the Institutions.  

In order to implement the new Staff Regulations from day one, it is necessary to review all the 
existing  detailed  implementing  rules,  to  update  them  where  necessary  and  to  formulate  a 
certain  number  of  new  rules  on  new  issues  such  as  the  right  to  part-time  work  in  certain 
circumstances, and extended family and compassionate leave. This effort began in April 2003 
and will be intensively pursued in early 2004 to allow entry into force of the necessary rules 
from the day the modified Staff Regulations take effect. 

Managing enlargement 

In  2003  the  Commission  began  recruiting  auxiliary  staff  from  the  new  Member  States, 
thereby  starting  the  process  of  integration  of  new  colleagues.  The  budgetary  authority  has 
agreed to grant the posts requested by the Commission for 2004 in the context of enlargement. 
The  year  to  come  will  therefore  see  the  first  intake  of  new  officials  as  planned.  It  will  be 
possible  to  assure  the  timely  recruitment  of  permanent  staff  from  the  new  Member  States 
thanks  to  the  launching  in  2003  of  a  high  number  of  competitions,  organised  on  an  inter-
institutional  basis  by  the  European  Personnel  Selection  Office  (EPSO).  These  competitions 
were successfully launched in 2003. The first stage has already been finalised and the results 
are  available.  This  unprecedented  exercise  demonstrated  the  benefits  of  the  Institutions 
joining forces in the context of reform in order to cope with enlargement. It should be noted 
that,  before  successful  candidates  can  actually  take  up  their  posts,  the  Council  will  need  to 
adopt  the  Regulation  on  the  derogation  regime  on  geographical  balance,  which  is  currently 
being negotiated at political level.  

New staff appraisal system 

As regards implementation of the elements of staff reform that can be carried out under the 
existing Staff Regulations, the Commission progressed in 2003 with the job of implementing 
decisions taken in 2001 and 2002. The first staff appraisal exercise based on the new Career 
Development  Review  system  was  implemented  across  the  Commission  in  2003  within  the 
foreseen  deadlines  (with  the  exception  of  Delegations  who  faced  problems  of  distance  that 
have been addressed), and the promotion exercise for 2003 was carried out on the basis of the 
new appraisal system, as foreseen. This has confirmed the reinforced link between merit and 
career  advancement  in  the  Commission  and  increased  the  transparency  of  promotion 
decisions.  It  should  be  noted,  however,  that  Commission  services  perceived  the  exercise  as 
administratively  burdensome,  and  difficulties  with  the  quantitative  marking  system  were 
encountered that have now been addressed. Justified criticisms have been taken on board in 
revising  the  details  of  the  implementing  rules,  and  the  appraisal  exercise  is  expected  to 
address these difficulties effectively in 2004.  

Mobility 

Regarding  compulsory  mobility  for  sensitive  posts,  in  compliance  with  Internal  Control 
Standard n° 5 the Commission set itself the objective of identifying all sensitive posts and of 
moving all jobholders occupying a sensitive post in the financial or personnel area for more 
than 7 years by the end of 2003. This unprecedented exercise has been energetically pursued 
and  DGs  are  required  to  identify  sensitive  posts  through  the  monitoring  tool  in  place  (Job 

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Information System). A report on the implementation of this operation, which has presented a 
number of practical difficulties, notably for replacing post-holders with a specialised profile, 
will  be  produced  by  end  March  2004.  As  for  non-compulsory  mobility,  the  guidelines  on 
mobility adopted in February 2002 have been steadily implemented while practical problems 
encountered on the way have been addressed.  

Training 

Reinforced training geared to career development needs continued to be given a high priority 
in  2003.  Overall,  the  average  number  of  training  days  per  official  in  the  year  was  8.32, 
showing an increase on 6.9 cited last January. 99% of the general training budget and 100% 
of the language training budget was committed. The general training budget, which increased 
steadily  in  2002  and  2003  following  a  considerable  increase  of  63.6%  in  2001,  has  been 
increased substantially by a further 37% for 2004. 

The  first  annual  Strategic  Training  Framework  was  adopted  for  2003  to  implement  the 
Commission decision on Staff  Training Policy of May 2002. It  focused on the needs of the 
Commission  as  a  whole  and  identified  priorities.  As  a  result,  the  central  training  catalogue 
was substantially extended, notably in the fields of management and financial administration, 
and particular courses were made compulsory for all staff or designated as pre-conditions for 
certain  career  steps.  For  the  body  of  Commission  staff,  a  new  tool  serving  to  identify 
individual training needs - the Training Map - formed an important element of the new staff 
appraisal system and was implemented in the 2003 exercise. Participation in financial training 
courses grew from around 3800 participants during 2001 to around 7100 participants in 2003, 
and  in  2004  a  range  of  new  financial  courses  will  be  added  to  the  29  already  on  offer. 
Management training was designated compulsory for current managers as well as for future 
Heads of Unit, and around 500 officials participated in the two compulsory or conditional in-
house management courses in 2003, while a number attended external management courses. 

Middle and senior management 

Concerning middle management, a draft Commission Decision was approved by the college 
and will be consulted with staff representatives before final adoption foreseen in early 2004, 
which  serves  to  clarify  the  role  and  position  of  Heads  of  Unit  in  the  organisation,  makes 
management  training  obligatory  before  the  first  appointment  to  a  Head  of  Unit  post, 
introduces a probationary period, and foresees more regular mobility and the possibility of re-
assignment to a non-managerial post. 

The  pilot  project  for  the  performance  appraisal  of  senior  officials  (Directors-General  and 
Directors) was completed in 2003. This demonstrated the need to revise some of the central 
elements, and on this basis the final approach to be put to the college in 2004 will bring the 
system  closer  to  the  model  that  applies  to  other  staff.  Meanwhile,  the  test  phase  for 
assessment  centres  has  been  completed  and  these  centres  will  be  used  in  2004  for  the 
selection  of  external  recruits  including  those  from  the  new  Member  States.  As  regards  the 
mobility of senior officials, in line with the Commission’s commitments, no Director-General 
has  been  in  their  current  post  for  more  than  5  years.  This  compares  favourably  with  the 
situation in September 1999, when 12 A1 officials had been in post for more than 5 years, 8 
of which for more than 7 years. Since the present Commission took office, there have been 40 
transfers between services at A1 level and 76 transfers at A2 level.  

Equal opportunities 

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In  the  field  of  equal  opportunities,  in  December  2003  there  were  39  female  officials 
occupying  A1  and  A2  posts  out  of  a  total  of  270,  as  compared  with  35  out  of  259  in 
December  2002  (14.4%  compared  with  13.5%).  Further  advances  in  the  field  of  equal 
opportunities  will  be  made  possible  with  the  entry  into  force  of  the  new  Staff  Regulations, 
which in particular allow for more flexible working arrangements in order to make it easier 
for staff to reconcile professional and family lives.  

Highlights in 2003 

•  Negotiations on the Staff Regulations have been finalised pending verification of 
the legal text in the Council. There are no further obstacles on substance to their 
timely adoption. 

•  EPSO  launched  32  enlargement  competitions  and  completed  the  first  phase, 
which should lead to sufficient numbers of available laureates by the end of 2004  

•  Officials dedicated on average 8.32 days to training  

•  The general training budget received an increase of 37%, and 99% of the general 

training budget and 100% of the language training budget were committed 

•  All  9  Commission  Decisions  adopted  under  the  existing  Staff  Regulations  to 
execute the personnel policy chapter of the White Paper have been implemented  

•  The  first  staff  appraisal  and  promotion  exercise  based  on  the  new  system  was 

carried out within the foreseen deadlines 

•  No Director General has been in their current post for more than 5 years 

2.5. 

Internal Control and Financial Management 

The new Financial Regulation 

With  the  entry  into  force  on  1  January  2003  of  the  new  Financial  Regulation  and  its 
Implementing  Rules,  the  internal  control  system  of  the  Commission  has  changed 
substantively. The new rules contain notably the abolition of the central ex-ante control and 
the  redefinition  of  the  role  of  financial  actors  in  order  to  make  them  more  accountable,  the 
establishment  of  a  legal  framework  for  grants,  the  transposition  of  the  Public  Procurement 
Directives and a clear framework for budgetary execution. 

A number of articles of the new Financial Regulation make specific reference to instruments 
and  bodies  introduced  by  Reform.  Four  outstanding  issues  with  relevance  to  the 
implementation  of  the  new  Financial  Regulation  are:  the  new  accounting  system,  financial 
liability  of  officials,  the  creation  of  a  Financial  Irregularities  Panel  and  the  provision  of 
standard contracts. 

The  project  to  reform  the  accounting  system  moved  ahead  as  planned  in  2003.  The  project 
team was reinforced with 9 permanent  posts and 5.5 auxiliary posts. The  funds  for  external 
consultancy  advice  were  mobilised  and  a  framework  contract  was  signed  with  external 
consultants. In addition, project processes for monitoring, reporting, risk management, change 
management, stakeholder involvement and quality management were formalised. 

Financial  liability  of  all  officials  is  set  out  in  Article  22  of  the  Staff  Regulations,  to  which 
Article  66  of  the  Financial  Regulation  refers.  The  Commission  adopted  on  23  July  2003  a 
working  document  on  the  application  of  Article  22  which  sets  out  the  conditions  for  its 

10 

 
 
  
 
application  as  well  as  the  procedure  to  be  followed.  The  concertation  process  with  Trade 
Unions and Staff Associations (OSP) started in November 2003 and is still ongoing. 

By decision C/2003/2247 of 9 July 2003, the Commission set up the Financial Irregularities 
Panel  foreseen  in  Article  66  (4)  of  the  Financial Regulation, which functions independently 
and  is  charged  to  determine  whether  a  financial  irregularity  has  occurred  and  what  the 
consequences should be. The search for Members of the Panel concluded in 2003. In February 
2004,  the  former  President  of  the  European  Court  of  Auditors,  Mr.  Jan  O.  Karlsson,  was 
appointed chairman of the Panel.  

Services  were  provided  with  a  new  Vade-mecum  on  Public  Procurement,  which  will  in  its 
final version include standard models for individual and framework contracts for services and 
supplies. Standard contracts for services and for supply framework contracts were included in 
the Vade-mecum in 2003. The remainder of model contracts – a standard service framework 
contract, a supply contract and a low-value supply/service contract - are under preparation and 
will  be  adopted  early  in  2004.  The  Commission  also  adopted  standard  grant  agreements  in 
order  to  help  services  to  apply  the  relevant  provisions  and  to  harmonize  the  terms  of 
agreements to be established between Commission and beneficiaries. 

Internal Control Decisions 

In  addition  to  recommendations  and  requests  by  the  discharge  authority  and  the  Court  of 
Auditors,  Annual  Activity  Reports  and  Declarations  were  the  most  important  source  for 
further development of the internal control system. The Synthesis Report on the 2001 Annual 
Activity Reports identified in its Action 13 a degree of uncertainty as to the respective roles 
and responsibilities of key actors in internal control and internal audit. 

As  a  consequence,  the  Commission  adopted  a  decision  in  January  2003  which  requires  DG 
Budget’s  Central  Financial  Service  to  provide  an  overview  of  internal  controls  across  the 
Commission. The decision also asks Directors General to designate control “contact officers” 
(i.e.  the  Resource  Director  or  equivalent)  who  would  have  an  open  communication  channel 
with the Central Financial Service and provide it with the information required to establish the 
internal control overview. The IAS is required to comment on the draft Synthesis Report and 
to strengthen its support of the work of Internal Audit Capabilities. 

In  the  wake  of  the  Eurostat  crisis,  the  subsequent  Synthesis  Report  on  the  2002  AARs 
required  the  Central  Financial  Service  to  update  after  six  months  its  annual  overview  on 
internal  control  and  to  undertake  the  overview  on  a  DG-by-DG  basis.  Further  to  an  earlier 
decision  that  Commissioners  and  Directors  General  should  have  an  ongoing  dialogue  about 
internal control7, the 2002 Synthesis Report specifies that Directors General should report to 
their  Commissioner  at  least  twice  a  year  on  the  findings  of  internal  audit  and  issues 
communicated  to  OLAF.  In  addition,  the  Commission  asked  Directors  General  to  assess  in 
the Autumn of 2003 their services’ readiness to be compliant by the end of December 2003 
with the baseline requirements of the 24 Internal Control Standards. 

The Audit Progress Committee 

7 

The annual reports and declarations required of Directors-General under the reform of the Commission 
(Action 82 of the White Paper) – SEC(2001) 857 : “Matters which will ultimately figure in the report 
must  be  presented  and  discussed  during  the  ongoing  dialogue  between  the  Director-General  and  the 
Commissioner responsible throughout the year…” 

11 

 
 
  
 
                                                 
The  follow-up  to  recommendations  by  the  Internal  Audit  Service  is  first  and  foremost  a 
management  responsibility.  At  central  level,  however,  the  Audit  Progress  Committee 
monitors progress in the implementation of audit recommendations. The Committee is chaired 
by  the  Commissioner  for  Budget  and  includes  the  Commissioner  for  Personnel  and 
Administration  and  the  IAS  as  well  as  two  other  Commissioners  (Mrs.  Reding  and 
Mr. Vitorino) and an external expert in internal audit. 

In reaction to comments by the Court of Auditors, the Committee has introduced procedural 
and structural measures to manage any possible conflict of interest. It decided that Members 
of the Committee would not chair agenda points concerning audits of services that fall under 
the responsibility of the Member concerned. In addition, the Secretariat of the Committee was 
moved from DG Budget to the Secretariat General. 

Highlights in 2003 

•  New Financial Regulation enters into force.  

•  Accounting Reform project develops as planned. 

•  Reform  actions  on  financial  liability  of  officials  and  the  Financial  Irregularities 

Panel are being finalised. 

•  Commission  adopts  Action  13  decision  and  the  2002  Synthesis  Report, 

strengthening internal control communication. 

3. 

IMPLEMENTING REFORM IN 2004 

The main emphasis of the Reform programme for 2004 will be on implementation of changes, 
in particular those contained in the new Staff Regulations, which should enter into force on 1 
May  2004,  once  the  European  Parliament  has  provided  an  opinion  and  the  Council  has 
adopted the Commission proposal.  In addition, the new  Staff Regulations will be needed to 
ensure  that  the  Commission  and  the  other  Institutions  can  successfully  integrate  personnel 
from the acceding countries. 

3.1. 

Strategic Planning and Programming  

In  an  enlarged  Union  –  and  in  a  new,  enlarged  Commission  -  the  strategic  planning  and 
programming capabilities of the Commission will be of increasing importance to establish the 
priorities and implement the policies in a coherent way. 

It is clear that a Commission with 25 Members will need to make adjustments to its internal 
functioning.  For  instance,  decisions  will  have  to  be  taken  on  the  organisation  of  policy 
portfolios  among  Commissioners  and  careful  planning  is  required  to  ensure  a  smooth 
transition from the present to the next Commission. The fact that 10 new Commissioners will 
become Members of the College on 1 May 2004 will facilitate this process. 

In  the  context  of  the  preparation  of  the  new  Financial  Perspectives  (post-2006),  the 
Commission  intends  to  propose  a  simplification  and  rationalisation  of  the  financial 
instruments that it uses. The basic aim is to streamline the number of financial instruments in 
order to increase the transparency, efficiency and effectiveness of policy implementation. The 
Commission will in due course put forward the relevant proposals to this effect. 

12 

 
 
  
 
Outlook for 2004 

•  10 Commissioners from acceding countries to join College on 1 May 2004. 

•  As reflected in the Accession Treaty and the Commission’s proposals to the IGC, 
the  new  Commission  is  to  adopt  internal  decision-making  mechanisms  for  a 
College of 25. 

•  Commission  to  make  a  proposal  for  the  next  Financial  Perspectives,  which  will 

streamline the number of financial instruments. 

•  Handover of consolidated strategic planning and programming capabilities to the 

new Commission 

•  Generalisation  of  the  system  of  extended  impact  assessment  for  all  major  new 

proposals 

3.2. 

Personnel Policy 

In  addition  to  providing  the  next  Commission  with  a  strong  programming  and  planning 
framework, it will be crucial to ensure that it inherits a coherent and stable personnel policy 
system. Guaranteeing stability during the enlargement phase and ensuring a smooth transition 
to  the  new  Staff  Regulations  are  clearly  the  main  challenges  in  this  area  for  2004. 
Implementation in 2004 will, while maintaining the orientations already set by the personnel 
reform, focus on revising and fine-tuning the details on the basis of practical experience.  

With  the  foreseen  entry  into  force  of  the  new  Staff  Regulations  on  1st  May  2004,  the 
‘overhaul  phase’  of  personnel  reform  policy  will  be  complete.  The  Commission  can  then 
focus squarely on deepening the implementation of its new staff policy and ensuring support 
and  ownership  among  services  and  staff.  This  will  require  completion  in  early  2004  of  the 
detailed  rules  needed  to  implement  the  new  Staff  Regulations  from  day  one.  The  most 
significant change in 2004 – to affect every official including current and future staff – will be 
the implementation of the new career structure. Another important change to be implemented 
after  1st  May  2004  will  be  the  recruitment  of  contract  agents  into  the  Commission,  its 
administrative Offices and Agencies. 

With  regard  to  enlargement,  whilst  the  Commission  has  ensured  that  the  most  important 
preparatory steps have been taken – namely securing the necessary new posts and launching 
the appropriate competitions – the litmus test for the Commission’s readiness for enlargement 
still lies ahead. In this sense it will be essential to successfully recruit 740 officials8 following 
1st May 2004. By March 2004 it will also be necessary to adopt clear rules on how services 
are  to  recruit  staff  from  the  new  Member  States  in  appropriate  numbers  and  to  lay  down 
figures and procedures for recruiting management staff from the new Member States. 

Experience to date has shown that time is needed for the organisation to become accustomed 
to new systems, to adjust them to allow smooth operation, and for the advantages of reform to 
become clear to staff. During 2004, the Institution will need to demonstrate that appraisal of 

8 740 to be recruited on the ‘budget de fonctionnement’, while 51 are foreseen for the administrative Offices and OPOCE, 

and 70 for research. 

13 

 
 
  
 
 
 
                                                 
performance works to the advantage of those who deserve it and that the reward of promotion 
is  attainable.  The  central  administration  and  personnel  units  in  the  services  will  need  to 
communicate  with  staff  on  reform  and  enlargement  in  an  open  and  reliable  fashion.  In 
particular,  it  will  be  crucial  for  colleagues  and  the  administration  to  provide  clear  guidance 
and support to new staff from the moment they join.  

Outlook for 2004 

•  The successful recruitment and smooth integration of 740 officials after accession 

will test the Commission’s preparations for enlargement. 

•  Timely  finalisation  of  the  most  important  implementing  rules  is  necessary  to 

guarantee a smooth transition to the new Staff Regulations. 

•  Guaranteeing  staff  confidence  and  support  with  regard  to  the  Commission’s 
personnel  reforms  will  require  leadership,  open  communication  and  continuity 
between this and the next Commission in terms of the orientations of its personnel 
policy. 

3.3. 

Internal Control and Financial Management 

Although not directly addressed in the White Paper, further efforts are necessary to achieve 
the  Reform’s  objectives,  in  particular  in  the  area  of  accounting  where  the  recast  Financial 
Regulation  requires  the  production  of  accrual  accounts  by  2005.  This  objective,  in  turn, 
commits  the  Commission  to  undertake  a  major  change  to  its  information  systems.  It 
necessitates the development of an integrated computerised system to provide the additional 
functionality required. It is clear that the objective to comply with the Financial Regulation’s 
requirements  about  accounting  by  1  January  2005  is  ambitious,  but  at  this  stage,  the 
implementation plan is on track. 

Following  recommendations  of  the  European  Parliament,  OLAF  and  the  Internal  Audit 
Service,  the  Commission  has  reinforced  its  Early  Warning  System.  Work  related  to  the 
overhaul of the system being at an advanced state, a Commission decision was adopted on 3 
February 2004.  

Outlook for 2004 

•  Accounting Reform should be finalised for implementation at the start of 2005. 

•  After implementation of measures adopted in the wake of the Eurostat crisis, the 

internal control system will be stabilised (see below). 

4. 

MEASURES TO BE TAKEN IN THE WAKE OF THE EUROSTAT CRISIS 

This section presents the measures to be taken in the wake of the Eurostat crisis. As regards 
Eurostat  itself,  the  Commission  has  adopted  several  decisions  aiming  at  a  thorough 
reorganisation of this DG, including a new organisation chart based on two major changes - 
the  refocusing  of  the  Directorates  on  the  EU's  major  activities  and  policies,  and  the 
strengthening  of 
financial  management  and  control  over  Eurostat,  especially  at 
Director-General level. 

The  development  of  events  at  Eurostat  has  shown  the  need  to  review  and  consolidate 
information  circuits  between  services  and  the  political  level  on  the  one  hand  and  between 
central  and  operational  services  on  the  other  hand.  The  current  system  relies  on  rules  that 

14 

 
 
  
 
were established at the beginning of the Prodi Commission and which have since been revised 
regularly. 

Certain structural measures were already put in place in light of the difficulties encountered. 
In  particular,  the  Commission  and  OLAF  adopted  on  23  July  2003  a  provisional 
Memorandum of Understanding to clarify the information flow about internal investigations 
undertaken by OLAF. 

As mentioned above, the Commission can build the required improvements on a foundation 
of already reinforced provisions about the information flow between services and the political 
level.  The  requirement  remains  that  Commissioners  and  Directors  General  should  have  an 
ongoing  dialogue  about  a  service’s  policy  objectives  and  internal  control.  In  addition,  the 
Commission  decided  in  the  context  of  adoption  of  the  2002  Synthesis  Report  that  specific 
information about the result of internal audits and their follow-up must be communicated to 
the political level at least twice a year. The information provided should also include issues 
arising  from  the  work  of  the  Internal  Audit  Service,  the  European  Court  of  Auditors,  the 
Directorates General in the context of ex-post controls, and OLAF. Also in this context, the 
Commission  decided  to  produce  a  yearly  overview  and  a  mid-term  review  of  the  state  of 
internal control systems in all Commission services. 

These measures, however, do not cover all aspects of the analysis and audits of the Eurostat 
crisis  which  the  Commission  has  undertaken.  Therefore,  and  in  conformity  with  the 
commitments  made  by  President  Prodi  in  his  speech  of  25  September  2003,  which  were 
further  developed  in  his  presentation  to  Parliament  on  18  November  2003,  the  Commission 
has decided on a number of complementary measures to ensure that the Commission disposes 
at all times of the information necessary to exercise its political responsibility. 

4.1. 

Revision of the code of conduct governing relations between Commissioners and 
services9 

the  Commission  adopted  at 

Relations  between  Commissioners,  their  cabinets  and  services  are  governed  by  a  code  of 
conduct  which 
its  mandate  on 
18 September 1999.  This  code  describes  the  general  principles  which  should  guide  the 
relation between Commissioner and services. It sets out the respective roles of the cabinet and 
the services in the management of issues under the competence of the Commissioner and the 
rules which apply to their relation. Since the entry into force of this code the Commission has 
in  the  context  of  Reform  adopted  several  communications,  which  complete  these  rules  and 
provide further detail.10 

the  beginning  of 

Developments since 1999 and the need to improve the information provided to Members of 
the College justify today a revision of the code in order to put the emphasis on the political 
responsibility of the Commissioner as well as on the responsibility of the Director General of 
Head of Service vis-à-vis the Commissioner, and through him or her, before the Commission. 

9 SEC(1999)1481 
10.In  this  context,  the  following  documents  are  of  particular  importance :  Charter  of  delegated  authorising  officers 
(SEC(2000)2203  of  13.12.2000  in  its  updated  version) ;  Communications  about  the  methodology  for  the 
establishment of Annual Reports (Communication of 27.06.2001 “The annual reports and declarations required of 
Directors-General  under  the  reform  of  the  Commission  (action  82  of  the  White  Paper)”  -  SEC(2001)  875/6 ; 
Communication of 21.01.2003 “Clarification of the responsibilities of the key actors in the domain of internal audit 
and  internal  control  in  the  Commission”  -  SEC(2003)59 ;  Communication  of  21.01.2003  “The  2002  review  of 
implementation of activity-based management in the Commission, including clarification of the methodology of the 
methodology of the establishment of Annual Activity Reports” – COM(2003) 28 final/2 

15 

 
 
  
 
                                                 
At  the  level  of  the  basic  rules,  the  amendments  specify  further  the  nature  of  information 
which the Commissioner must receive form his or her services. This information must be as 
exhaustive as possible and should in particular cover the quality of implementation in internal 
control  standards  in  his  or  her  services,  the  content  of  audit  work  and  the  follow-up  to 
previous audits. 

The  code  of  conduct  also  comprises  a  specific  procedure  for  the  information  of  the 
Commissioner  concerning  all  facts,  situations  or  questions  which  arise  from  management  - 
and  notably  financial  management  -  and  whose  seriousness  could  call  into  question  the 
Commissioner’s responsibility or that of the College. A new version of this code of conduct, 
which includes the amendments set out above, is annexed to this communication. 

4.2. 

Treatment  of  and  follow-up  to  allegations  relating  to  fraud,  irregularity  and 
other reprehensible acts 

The treatment of allegations relating to fraud, irregularity and other reprehensible acts at the 
Commission has been reinforced considerably during the last years with the establishment of 
OLAF,  which  has  benefited  for  its  investigations  from  total  operational  independence,  a 
central  Internal  Audit  Service  and,  more  recently,  the  creation  of  a  Disciplinary  and 
Investigative Office (IDOC) as well as the additional provisions in the draft of the new Staff 
Regulations. However, the Eurostat affair has shown that the current system does not provide 
the  Commission  with  a  sufficiently  complete  overview  of  all  available  information 
concerning  a  specific  matter.  As  a  matter  of  fact,  the  Commission’s  knowledge  of  all  the 
information  available  on  Eurostat  was  for  a  long  time  too  partial  and  fragmented,  which 
prevented it form taking rapid precautionary measures at an early stage. 

It  is  for  this  reason  that  the  Commission  considers  it  necessary  to  ensure  that  pertinent 
information is collected from all sources, analysed rapidly and communicated to the College. 
It  will  therefore  charge  a  group  of  Commissioners  to  ensure  that  all  information  and/or 
allegations  of  fraud,  irregularity  and  other  reprehensible  acts  will  be  treated  in  conformity 
with  existing  procedures  and  will  be  the  subject  of  rigorous  follow-up  by  the  concerned 
services. Furthermore, this group of Commissioners will bring the most important cases to the 
attention of the Commission, i.e. those cases which require precautionary measures in order to 
protect the interests of the Union, in particular those of a financial nature. 

This group will bring together the President, the Commissioner responsible for Personnel and 
Administration and the Commissioner responsible for the Budget and the Fight against Fraud. 
The group of Commissioners will be assisted by a high-level interservice group, composed of 
the  Secretary-General,  who  will  preside  its  meetings,  and  the  Directors  General  of  DG 
Personnel  and  Administration,  of  DG  Budget,  of  the  Internal  Audit  Service  and  the  Legal 
Service. 

This  new  approach  will  require  the  active  and  continuous  cooperation  of  all  services11  and 
actors  who  are  the  natural  addressees  of  information  concerning  allegations  of  fraud, 
irregularity or other reprehensible acts and whose competence for analysis and follow-up in 
their respective domains of responsibility remains entirely untouched. It will therefore require 
the  cooperation  of  middle  and  senior  management,  and  above  all  of  Directors  General  or 
Heads of Service who are also the first interlocutors of whistleblowers. 

11This concerns in particular the European Anti-Fraud Office (OLAF), the Disciplinary and Investigative Office (IDOC), the 

Directorate General for Personnel and Administration and the Internal Audit Service. 

16 

 
 
  
 
                                                 
4.3. 

A reinforced framework for communication in the domains of internal control 
and internal audit 

There are a number of questions that were raised by the Commission’s Internal Auditor in the 
last  chapter  of  his  report  about  the  examination  of  contracts  and  grants  at  Eurostat.  In  this 
report,  he  presented  the  governance  lessons  which  he  draws  from  the  Eurostat  affair. 
Presented as concrete steps forward, these lessons are essentially a review of the governance 
of internal control and audit structures in the Commission. The Internal Auditor recommends 
in particular that the central services should ensure increased supervision of these structures in 
the  services  and  proposes  the  establishment  of  open  lines  of  direct  communication  and 
functional reporting to the Accountant on the one hand, and the Internal Auditor on the other 
hand.  

In this context the Commission has decided the following measures:  

–  In conformity with the clarifications made in the Communication of 21 January 200312, the 
role of Resource Directors in the elaboration of the Annual Activity Report will be made 
explicit.  The  Resource  Director,  or  the  person  designated  by  the  Director  General,  will 
certify in a separate statement firstly that he has reported his advice and recommendations 
to the Director General on the overall state of internal control in the DG and that, secondly, 
the  Annexes  to  the  Annual  Report  dealing  with  internal  control  matters  are  accurate  and 
complete.  This  statement  will  be  annexed  to  the  Report,  starting  with  this  year’s  AAR 
exercise relating to financial year 2003. In case of disagreement, this will be brought to the 
attention of the Commissioner as well as the Secretary General and the Director General of 
DG Budget.  

–  In order to improve the horizontal flow of information between Commission auditors, the 
Internal Audit Capabilities will systematically transmit all their finalised audit reports (i.e; 
after conclusion of the contradictory procedure) to the Internal Audit Service. The reports 
will contain an executive summary which will highlight all critical findings of the report. 
The Internal Audit Service will summarise important IAC findings, recommendations and 
actions taken by DG management in a biannual report. 

–  The  Internal  Audit  Service  will  strengthen  its  support  for  and  coordination  with  Internal 
Audit Capabilities. Therefore, the Internal Auditor will preside the meetings of Auditnet, 
which  brings  together  all  Internal  Audit  Capabilities.  A  vice-chair  will  be  elected  from 
among the heads of Internal Audit Capabilities. 

–  A representative of the Internal Audit Service will participate in the procedures leading to 
the nomination of a Head of an Internal Audit Capability. Similarly, a representative of DG 
Budget will participate in the procedures leading to the nomination of a Resource Director. 

–  Management tools that are at the disposal of all services – including internal control and 
internal audit services - will be further developed: first and foremost, a data base of legal 
entities  will  be  developed  and  the  ABAC-data  base  of  contracts  (formerly  the  ICON-DB 
data  base)  will  be  made  available  to  all  services.  Once  the  authorising  services  have 
entered the requisite data and provided the adequate supporting documents, the database of 
legal entities will provide authorising officers – before they sign a contract - with validated 

12  “Clarification  of  the  responsibilities  of  the  key  actors  in  the  domain  of  internal  audit  and  internal  control  in  the 

Commission” - SEC(2003)59 

17 

 
 
  
 
                                                 
information about all entities with which the Commission has had contractual relationships 
since 1999. These new instruments should come on stream from mid-2004. 

A  synopsis  of  the  main  internal  control  information  flows  resulting  from  original  Reform 
decisions of March 2000 and measures taken thereafter is provided overleaf. 

4.4.  Whistleblowing 

Since the Commission decision of 2 June 1999, every official becoming aware of evidence of 
possible  serious  reprehensible  acts,  has  been  obliged  to  inform  his/her  Head  of  Service  or 
Director  General,  or,  if  the  official  considers  it  useful,  the  Secretary  General  or  OLAF 
directly.  Furthermore,  through  its  decision  of  4  April  2002  the  Commission  has  opened  the 
possibility for officials to address such information to the Presidents of the Court of Auditors, 
the European Parliament, the Council or the Mediator, if the official concerned had previously 
disclosed information to OLAF and/or the Commission, and has allowed a reasonable period 
for them to take appropriate action. 

Although  the  Commission  was  the  largest  source  of  information  for  OLAF  case  records  in 
2002/2003,13 experience has however shown that, despite these rules, staff often seem to have 
chosen  not  to  follow  the  whistleblowing  procedure  as  identified  above.  In  the  majority  of 
cases, officials either raised such concerns about serious wrongdoings in another context (for 
example at the occasion of a career review), or the allegations made by the official concerned 
were not “serious wrongdoings” in the sense of the whistleblowing provisions. 

The Commission therefore intends to take measures to increase  the  awareness of  these new 
rules  amongst  staff.  More  publicity  will  be  given  to  these  rules  via  other  means,  such  as  a 
publication in the internal newspaper and the inclusion of these rules in information provided 
to new staff. 

In  its  measures  to  raise  the  profile  of  these  rules,  the  Commission  will  also  highlight  the 
protection offered to bona fide whistleblowers. Of course, in order to enable the Commission 
to  apply  the  protection  measures  described  below,  the  member  of  staff  concerned  will  be 
expected  to  identify  him-  or  herself  as  a  whistleblower  to  the  Institution  and  to  observe  the 
procedures as outlined in the whistleblowing rules.  

–  In  practice  this  protection  means  that  the  Commission  will  take  all  necessary  steps  to 
assure staff that complying with their whistleblowing obligations will not negatively affect 
their career. This will mean that if the member of staff concerned wishes to be moved to 
another Commission department in order to safeguard him or her against hostile reactions 
from his immediate work environment, then the Commission will facilitate such a move; 

–  Particular  care  will  be  taken  during  staff  evaluation  and  promotion  procedures  to  ensure 
that  the  whistleblower  suffers  no  adverse  consequences  in  this  context.  The  career 

13 

According to OLAF’s Activity Report 2002/2003, the Commission provided 173 case records, i.e. 26% 
of total new case records. However, this figure is not disaggregated to show how many of these referrals 
to  OLAF were  undertaken  by  whistleblowers.  See: OLAF  Fourth Activity  Report of  the  Year  ending 
June 2003, p.13 

18 

 
 
  
 
                                                 
guidance function, introduced under the administrative reform, will have a monitoring role 
in this respect. In those cases where the career development report of staff who have made 
use of the whistleblowing provisions has significantly deteriorated, they will be able to ask 
for a review of their career development report through a special process. 

19 

 
 
  
 
MAIN HORIZONTAL AND VERTICAL INFORMATION FLOWS ON INTERNAL CONTROL AND INTERNAL AUDIT

Audit Progress 
Committee 

•  Follow-up of Audit 

Reports 

COMMISSIONERS 
(AS INDIVIDUALS OR AS COLLEGE) 

High-Level Group 

•  Follow-up of 

allegations  of  
fraud/irregularity 

Internal Audit Service 

•  Biannual Report 
on internal audit 

•  Audit reports 

Directors General 

• 
• 
• 

Annual Activity Reports/Declarations 
Continuous audit + control information 
Biannual report on work of control and audit bodies 

Audit Capabilities 

•  Audit Reports 
• 

Resource Directors 

•  Audit and control information 

•  Observations on Annual 

Activity Report/Declaration

DG Budget/Central 
Financial Service 
•  Annual overview on 
internal control 
systems, updated 
after 6 months 

20 

 
 
  
 
 
 
 
 
5. 

MONITORING REFORM 

5.1. 

Indicators 

The Commission has so far monitored the implementation of Reform by making reference to 
the 98 White Paper actions. However, due to the fact that implementation of these actions will 
conclude this year, this way of assessing progress is no longer as useful a tool as it was in the 
past. In addition, many measures that amend or expand upon earlier Reform proposals, are a 
direct consequence of Reform, in particular those resulting from the Annual Activity Reports. 
A consolidated view of original and amended Reform measures related to internal control is 
provided in Annex 1 and Annex 5. 

The Institution has at its disposal a number of indicators, which provide a global picture of 
developments in specific areas, such as, for instance, the speed of payments, the quantity of 
training  or  the  gender  balance  among  its  management  staff  (see  Annex  6).  While  it  is 
extremely difficult to assess cultural change in an organisation, the Reform programme was 
based on the premises that a change in systems and structures combined with the provision of 
training  was  a  precondition  for  a  change  in  culture.  The  indicators  seem  to  confirm  this: 
where  systems  and  structures  have  changed,  performance  has  improved.  For  instance, 
payment delays continue to decrease (to below 43 days on average), the vacancy rate has been 
further reduced to a very low level of 1.9% and the annual recruitment of women has further 
increased  to  more  than  33%  in  2003.  The  offer  of  training  underpinning  these  changes  has 
met with a very strong response: total participant days for centrally organised general training 
were  8445  in  1999  before  Reform  started,  with  23883  in  2002  and  28507  in  2003.  By 
comparison with 2002, the total number of training days in 2003 grew by 22% from 165000 
to 202000. By contrast, in areas that require an implementation of the new Staff Regulations, 
the change in indicators is far less drastic. For instance, it is expected that the share of staff on 
part  time  work  would  increase  with  the  implementation  of  new  provisions  of  the  new  Staff 
Regulations. 

There  are  other  indications  of  efficiency  gains,  in  particular  related  to  reinforced 
Interinstitutional cooperation. The creation of a European Administrative School is estimated 
to  result  in  economies  of  scale  equivalent  of  about  20%  of  the  human  resources  necessary 
without  this  cooperation.  The  newly  created  European  Personnel  Selection  Office  will 
function with an annual budget of just over € 21 million, which is 11% less than the previous 
expenditure  across  institutions  despite  the  increased  workload  stemming  from  enlargement. 
The creation of administrative offices was undertaken with the objective of securing overall 
savings in the region of 10% by 2010. 

However, it is clear that the implementation of Internal Control Standards and systems remain 
the most important benchmark of Reform progress, not only in the financial control area, but 
also in other areas of Reform policy. 

5.2. 

Internal Control Systems 

The monitoring arrangements for internal control were already embedded in certain Reform 
actions  and  have  continued  to  evolve.  The  basic  framework  of  control  requires  Directors 
General  to  conduct  an  annual  review  of  their  internal  control  arrangements  to  support  the 
declaration on controls in the Annual Activity Report and Directors General have, to varying 
degrees  been  self-assessing  those  arrangements  since  the  latter  part  of  2000.  Most  recently 
this  has  involved  an  assessment  undertaken  in  the  autumn  of  2003  of  the  readiness  to  be 

21 

 
 
  
 
compliant  with  the  baseline  requirements  of  all  Internal  Control  Standards  by  the  end  of 
December.  This  highlighted  that,  whilst  expected  compliance  was  expected  to  be  generally 
high, there remained a number of key areas of internal control, notably on the documentation 
of  procedures,  risk  assessment  and  supervision  where  further  time  and  work  would  be 
required.  In  mid-February  2004  Directors  General  will  be  expected  to  confirm  the 
assessments previously made. 

So  far  the  self  assessment  exercises  undertaken  by  Directorates  General  have  focused  on 
compliance  with  the  baseline  requirements  of  the  Control  Standards,  but  the  latest 
developments  have  seen  a  move  by  Directors  General  to  consider  the  extent  to  which  their 
systems  of  control  are  effective.  This  represents  a  significant,  but  natural  evolution  in  the 
process  of  responsibilisation  and  reflects  a  need  for  Directors  General  to  demonstrate  more 
explicitly  that  they  have  the  means  to  support  their  annual  declaration  on  the  adequacy  of 
their internal control systems. 

The annual overview on internal controls, starting in April 2004, will constitute an important 
component of the arrangements for monitoring implementation. It will bring together existing 
information  on  internal  control  issues  on  a  DG  by  DG  basis,  summarized  in  one  overall 
document and brought to the attention of the College. 

The  increased  responsibilisation  of  Management  is  reflected  in  the  annual  management 
assurance declaration issued by Directors General on an annual basis as well as through the 
Commission's synthesis report, through which the College assumes its political responsibility 
for  controls.  Through  its  audit  report,  the  Internal  Audit  Service  provides  complementary 
assurance to the College. 

Separately  and  independently  from  management,  the  IAS  assesses  the  effectiveness  of  the 
Commission's internal control systems. Through its audit work the IAS will be able to provide 
an intermediate audit opinion on the quality of the internal controls in Commission services 
towards the end of 2004 and a full audit opinion in 2006. 

In  order  to  further  increase  the  Audit  Progress  Committee’s  technical  knowledge,  the 
Commission decided that the Committee should recruit a second external member.  

6. 

SUMMARY AND CONCLUSION 

Reform, and the achievement of demonstrably beneficial effects, is necessarily a process not 
an  event.  Meaningful  systemic  changes  cannot  have  immediate  productive  results,  and  the 
time between the introduction of reform and the manifest realisation of its objectives can be 
disruptive. Nonetheless, important changes are visible in the Commission. Strategic Planning 
and Programming is providing the organisation, individual staff and external partners with a 
far clearer sense of the direction and the goals of this organisation and its different services. 
The responsibilities of each financial actor are greatly enhanced by the new rules in place, and 
these duties are accepted and properly executed by staff. The quality of management is being 
raised and high quality is continually required and fostered among managers.  

It is therefore not a job for this Commission alone. This Commission has designed, embarked 
upon,  implemented  and  begun  to  refine  the  most  ambitious  administrative  reform  in  this 
organisation’s  history.  The  next  Commission  must  not  be  distracted  from  the  ongoing  task 
and  must  uphold  the  orientations  set  by  the  White  Paper  of  March  2000  and  the  wealth  of 
implementation.  The  Commission,  before  and  after 
experience  gained  during 

22 

 
 
  
 
November 2004,  must  also  continue  to  be  ready  to  make  constant  ‘post  production 
adjustments’ to achieve further improvements.  

If the main challenge for 2003 was the need for robust implementation of major structural and 
procedural  reforms,  then  2004  will  be  the  year  when  reform  needs  to  become  fully 
operational:  bringing  Commission  services  beyond  mere  compliance  to  a  deeper  level  of 
implementation  must  be  the  aim  for  the  reform  project  in  2004  and  beyond.  Managers  and 
staff at all levels need to become increasingly confident in the new systems and procedures, 
and the sense of ownership of these new arrangements must improve across the organisation 
so that the body of staff feel increasingly empowered and decreasingly overwhelmed by the 
changes  in  place.  Deepening  the  level  of  implementation  also  involves  making  continuous 
improvements,  as  various  aspects  of  our  policies  need  to  be  fine-tuned  on  the  basis  of 
experience and the results of evaluations.  

In particular, the Commission will need to demonstrate to its own staff and the outside world 
that a system that devolves financial responsibility brings empowerment as well as reinforced 
obligation and strong, reliable systems of control. In the end, the internal control system must 
ensure  that  the  College  can  take  its  political  responsibility.  The  interest  which  Annual 
Activity Report and Declarations as well as the implementation of Internal Control Standards 
have  received,  bodes  well  for  an  improved  position  of  the  Commission  in  the  discharge 
procedure.  The  introduction  of  these  Reform  measures  has  provided  vehicles  for  a  very 
fruitful dialogue with the Court of Auditors and the European Parliament. At the very least, 
information  provided  in  the  Annual  Reports  will  be  a  solid  basis  for  explaining  the 
Commission’s position within each year's discharge procedure. In the long run, it should also 
lead to a more positive assessment in the context of the Court of Auditors Annual Report. 

The  impact  of  enlargement  represents  a  major  and  very  welcome  challenge  in  2004  and 
beyond.  In  2005  the  Commission  will  face  the  bulk  of  recruitments  from  enlargement.  It  is 
essential  that  Commission  services  are  able  to  operate  confidently  in  a  stable  environment 
during this demanding period of transition. 

The  effectiveness  and  legitimacy  of  the  Commission  continue  to  depend  upon  its 
independence,  accountability,  and  high  performance  as  a  multicultural  and  multinational 
public service organisation. With the reforms announced in the White Paper of March 2000 
now  firmly  rooted  in  the  set  up  of  the  organisation  and  the  conduct  of  its  staff,  this 
Commission  has  upheld  and  reinforced  these  values  and  set  a  clear  course  for  the  next 
Commission. 

* 

* 

*

23 

 
 
  
 
ANNEX 1 

REFORM ACTIONS  
STATE OF PLAY AS AT 31 DECEMBER 
2003 

24 

 
 
  
 
 
 1 

2 

3 

4 

Establishment of an inter-Institutional 
Committee on Standards in Public Life 

Draft Inter-institutional 
Agreement 

30/6/2000 

Code of Good Administrative behaviour 

Commission 
adopting new Code  

Decision 

30/4/2000 

Proposal for a Regulation on Public access 
to EP, Council & Commission documents 

Parliament  & 
Council 
Regulation on Public Access 
to 
& 
Commission documents 

Council 

EP, 

31/5/2001 

Communication on minimum standards for 
the 
the  Commission’s 
conduct 
consultation process. 

of 

Set  of  recommendations  on 
best practice in consultation 

31/12/2000 

- 

- 

- 

Proposal  adopted  29/11/2000 
SEC(2000)2077. 

Further  to  feedback  by  the  other 
institutions 
the  proposal  will  be 
withdrawn 

Decision  adopted  17/10/2000 
OJ L 267 (20/10/00). 

Implementation 
(SEC(2002)1266) 

report 

Regulation 
adopted 
(Parliament  &  Council) 
28/5/2001 OJ C223 (8/8/01). 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

of 

principles 

Approval 
consultation 
document  "Proposal  for  the 
and 
general 
minimum  standards  for 
the 
interested 
consultation 
parties"  (COM(2002)277  final 
of 15.06.2002) 

of 

Final  set  of  consultation  standards 
adopted. Commission Communication 
"Towards  a  reinforced  culture  of 
consultation  and  dialogue  -  General 
principles and minimum standards for 
consultation  of  interested  parties  by 
the  Commission"  COM(2002)  704 
final of 11.12.2002  

Note 

on 
Information 
Consultation, 
the  European 
Commission  and  Civil  Society 
13/9/2001SEC(2001)1361. 

The  list  of  the  Commission's  formal 
and  other  structured  civil  society 
consultation  groups  was  published  in 
June 2002 on the CONECS site. 

Agreement  signed  5/7/2000 
OJ C121 (24/4/01). 

force  and  under  continuous 

In 
implementation. 

Communication  adopted  by 
Commission 
8/6/2001 
COM(2001)314. 

Review  has  now  taken  the  form  of  a 
Commission 
Communication. 
Actions  7  &  8a have  been  integrated 
into  a  single  Communication  on  a 
new ICT strategy. Implementation of 

5 

Establishment  of  a  list  of  committees  & 
working  groups  involved  in  formal  or 
structured consultation procedures 

New  Commission  database 
on  consultation  bodies  for 
Europa server 

30/6/2001 

 05/2002  

6 

Framework Agreement with the EP 

Approval  of  Framework 
Agreement 
by  EP  & 
Commission 

early 

As 
possible 2000 

as 

7 

a)  Better 
use 
Communication Technology (ICT) 

of 

Information  & 

(Design  of  a  medium  term  strategy  for  IT 
policy, organisation & resources) 

of 

Review 
Information 
Communications 
Technology strategy 

overall 
& 

31/7/2000 

- 

- 

25 

 
 
  
 
 
 
b)  Upgrading  &  improving  the  security  of 
the 
communications 
networks (Definition of strategy) 

Commissions 

8 

a)  Feedback  mechanisms  &  technology 
development setting up procedures 

ongoing 

31/12/2000 

b)  Moving 
consultation using Internet. 

to 

interactive 

policy 

Review of interactive policy 
consultations 

31/12/2000 

Communication 
3/4/2001 C(2001)1014 

adopted 

c)  Constant  improvement  of  the  Europa 
Website 

Continual  improvement  to 
Commission INTERNET 

ongoing 

Communication 
6/7/2001 C(2001)1753 

adopted 

9 

Electronic 
transactions 

public 

procurement  & 

31/12/2000 

- 

of 

a.)  Review 
public 
procurement  Directives  & 
b.)internal 
practices  & 
internal  use  of  electronic 
signatures 

in 

Agreement 
the 
Conciliation  Committee  on  a 
joint  text  on  procurement 
reform 2000/0115 (COD) PE-
CONS 3696/03 of 9/12/03 

10 

Reporting on the record of individual DGs 
in meeting payment deadlines 

11 

Central Invoice register 

Part  of  new  presentation  of 
annual  activity  report  by 
each DG (see Action 82) 

Establishment 
Commission 
system 

of 
information 

31/1/2001 

1/5/2002 
full report) 

(for 

a five year programme now ongoing. 

Communication  set  out  two  linked 
mechanisms  for  IPM:  one  for  the 
collection  of  feedback,  the  other  for 
online  consultations.  Development 
and pilot actions are ongoing 

√ 

This  has  launched  the  modernisation 
of  EUROPA  leading  to  a  portal 
approach 
to 
providing 
information by theme. 

access 

Component a) completed 

Component b) not yet completed: The 
internal  project  plan  has  been  set  up 
and a prototype has been launched for 
electronic 
and 
dissemination  of  procurement  notices 
(eTendering by OPOCE). 

collection 

- 

Standard  reports  on  payment  delays 
available to DGs 

√ 

30/6/2001 

05/2002 

CIR deployed in 15 services, 

.  Revised  CIR  will  be  mandatory 
before mid 2004 for all services. 

- 

26 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12 

Design  a  new  Strategic  Planning  and 
Programming cycle (SPP) 

Adoption  of  guidelines  to 
operational services 

31/10/2000 

- 

Communication 
25/10/2000 SEC(2000)1744 

adopted 

2nd  annual  policy  strategy 
for 2003 

31/12/2000 

- 

Last  update  Communication 
adopted  on  21  January  2003 
COM(2003)28 

Communication 
SEC(2002)217/9 
27/2/2002 

adopted 

Definition  of  SPP  cycle  elements, 
ABM  components  and  calendar  for 
action. 

√ 

Communication 

SPP cycle fully operational.  

3rd  annual  policy  strategy 
for 2004 

Structured dialogue with EP 
and Council  

28/2/2001 

COM(2003)83 
5/3/2003 

adopted 

2004  APS  stock-taking  session 
on 11/9/2003 

Discussion  with  EP  & 
Council 

30/11/2000 

- 

2001 
reports by DGs 

Annual 

activity 

31/1/2001 

1/5/2002 

2002  Annual  Activity 
reports by DGs  

AAR  exercise  done  for  2001 
and 2002 with adoption of the 
corresponding  Synthesis  by 
the Commission: 

COM(2002)426 
adopted 
24/7/2002  and  COM(2003)391 
adopted 9/7/2003 

Discussion  with  Council  &  EP  on 
their  system  initiated.  Agreement  on 
interinstitutional 
on 
consultation 
Commission work programme. 

√ 

1/5/2003 

27 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
√ 

√ 

13 

Establishment  of  Strategic  Planning  & 
Programming function 

Commission  Decision  on 
SPP 
& 
organisation 
resources 

31/5/2000 

Commission  Decision  on 
SPP function 

31/7/2000 

- 

- 

Communication 
26/7/2000 
SEC(2000) 1294. 

adopted 

The two White Paper subactions were 
amalgamated  into  one  Commission 
decision  on 
function 
including  organisational  structure  & 
resources. 

the  SPP 

14 

Development  of  an  activity-based 
instrument to support ABM 

IT 

Development of IRMS 

30/9/2000 

IRMS  has  been  developed  to 
the  basic  ABM 
incorporate 
reporting 
requirements 
including  AMP  2003,  Agenda 
Planning 
and  Commission 
Work Programme 

Deployment 
of 
Commission wide. 

IRMS 

31/1/2002 

30/6/2002 

IRMS has been rolled out in all 
DGs.  

28 

up 

user 

follow 
to 

plan  module 

All  services  have  a  version  of  their 
Annual  Management  Plan  in  IRMS 
and  use  the  system  for  the  ongoing 
management of Agenda Planning and 
for 
their 
the 
of 
contributions 
the  Commission 
Work Programme. However, since the 
Management 
still 
presents  some  weaknesses  regarding 
the 
the 
friendliness 
interoperability  with  other  corporate 
systems, 
in 
September 2003 to suspend its further 
development and to launch a study in 
the  framework  of  the  interoperability 
action 
the 
Commission  in  the  Synthesis  of  the 
annual  activity  report  on  the  year 
2001 
adopted 
24/7/2002). 

it  has  been  decided 

(COM(2002)  426 

decided 

plan 

and 

by 

 
 
  
 
 
 
 
 
 
 
15 

Promote diffusion of ABM practise (launch 
pilots + training programmes) 

Launch  ABM 
programme 

training 

5/2000 

 06/2002 

16 

Strengthening the evaluation system 

17 

A framework for externalisation 

to 

the 
Communication 
Commission 
on 
strengthening  the  evaluation 
system 

31/5/2000 

Definition of new regulatory 
framework 

30/4/2000 

Communication 
Commission 

to 

the 

30/9/2000 

- 

- 

- 

29 

In  2003  an  interservice  ABM 
working  group  exchanged  best 
practice and updated the ABM 
best  practice  website.  Every 
month  between  2  and  4  ABM 
training seminars (FR and EN) 
were  carried  out  as  well  as 
targeted 
with 
individual  DGs.  The  ‘cellule 
de support’ was reinforced. 

sessions 

√ 

Communication 
26/7/2000 SEC(2000)1051. 

adopted 

Much  more  integrated  in  standard 
APS-cycle and ABM-approach. 

√ 

Communication 
13/12/2000 COM(2000)788. 

adopted 

Communication  adopted  on 
reforming  the  management  of 
external 
16/5/2000 
aid 
SEC(2000)814. 

Council  Regulation  adopted 
19.12.2002  on the  creation  of 
executive  agencies  to  carry 
out  specific  tasks  relating  to 
of 
management 
the 
Community programmes 

adopted 

single 
Commission 
Communication 
both 
subactions  i.e.  including  proposal  for 
a new type of agency 

covering 

√ 

added 

action  was 

after 
This 
publication  of  the  WP  but  is  in  line 
with  the  requirements  of  the  WP  on 
reform of the management of external 
aid. 

Guidelines  for  the  establishment  and 
operation  of  executive  agencies  and 
two  model  decisions  adopted  by 
Commission on 12/12/2003 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
18 

Simplification  of  procedures  and  working 
methods 

I. Implementation of Interim 
Action  Plan 
(cf.  SEC 
(2000)1757/6)) 

- 

Regulation 
Commission 
2343/2002  adopted  on  the 
Financial 
framework 
Regulation 
traditional 
agencies, of 19.11.2002 

for 

Re I: Interim Action Plan now 
completed. 
report 
available  on  the  simplification 
website. 

Final 

II.  New 
strategy 
2002(867)) 

simplification 
SEC 
(cf. 

a) Quality Circles 

b) Simplification website 

c)  Manual  of  Operational 
Procedures 
the 
Commission 

of 

30 

II: 

Re 
strategy 
New 
developed.  a)  Three  Quality 
issued 
Circles 
recommendations. 
b) 
Simplification  website  with 
suggestions  box  launched.  c) 
Electronic, 
of 
Procedures 
Operational 
and 
completely 
available 
and 
French. 

updated 
in  English 

Manual 

√ 

for 

Re  II:  New  actions  of  simplification 
based  on  a  bottom-up  methodology 
were  further  developed  in  2003:  a) 
Three Quality Circles (“Service Level 
Agreements”,  “Who  signs  what  and 
“Preparing 
enlargement”) 
delivered  recommendations  on  best 
practice  in  2003.  b)  An  interactive 
simplification  was 
website 
in 
January  2003, 
launched 
particular 
a 
to 
access 
“suggestions 
100 
suggestions  were  received  in  2003. 
The  website  was  promoted  through 
poster  and  postcard  campaigns  c)  A 
new, 
of 
Operational  Procedures  was  launched 
be  on-line  in  English  and  French  and 
will  continuously  be  developed  and 
systematically updated 

on 
in 
giving 

electronic  Manual 

box”  Over 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
19 

responsibility  & 
Promoting  personal 
initiative & leaner administrative structures 

Guidelines 
description 
assignments 

for 
& 

job 
task 

30/4/2000 

- 

Implementation 
services 

by 

all 

30/7/2000 

More 
methods - Action Plan 

efficient  working 

31/12/2000 

20 

Cross-fertilisation,  teamwork  &  quality  of 
services 

- 

- 

- 

- 

- 

Communication 
(pilot 
exercise) 
SEC(2000) 852. 

adopted 
24/5/2000 

Guidelines 
adopted 
19/2/2002 C(2002)539. 

on 

- 

See Action 18 

the 
guidelines 

Based on the Communication of May 
subsequent  pilot 
2000  and 
for 
exercise, 
job 
descriptions  were 
and 
adopted 
implemented. The new framework for 
objective  setting  combined  with  the 
staff  appraisal  report  as  foreseen  in 
the  White  Paper  are  part  of  the 
general implementing rules for Article 
the  Staff  Regulations  (see 
43  of 
actions 32-33). 

On-going process. 

See action 18 

√ 

√ 

Note: Actions 21 & 22 have been merged & reviewed: one Communication has dealt with A1 & A2 & the other with Middle Management. 

21 

Selection of senior managers 

Commission  Decision 
improve 
Committee 
Appointments 

to 
the  Consultative 
on 

31/7/2000 

- 

Senior 

on) 

(Decision 
Management 
Communication 
21/12/2000 SEC(2000)2305. 

adopted 

Proposal  for  Head  of  Unit 
appointments (A5/4/3) 

31/12/2000 

- 

New  appointment  procedures 
implemented 

Assessment 
application  of 
appointments to A1 & A2 

of 
the 
rules  on 

30/6/2002 

6/2003 

31 

Implementation ongoing 

√ 

and 

analysis 

Following 
of 
principles  laid  down  in  1999 
and  2000,  clear  guidelines  for 
selection 
appointment 
procedures  for  A1  and  A2 
approved 
by  Consultative 
Committee  on  Appointments 
and  circulated  to  services  in 
September 2003.  

 
 
  
 
 
 
 
 
 
 
22 

Ensure 
management performance 

continuing 

evaluation 

of 

Introduction of appraisal for 
A1s & A2s 

30/4/2001 

Incorporated 
Communication 
appraisal, 
appointment 
Commission 
20/12/00. 

into 
“The 
and 
senior 
of 

selection 
of 

officials” 

Pilot project for A1 and  A2 appraisal 
completed. 

management 

Commission  decision  on  annual 
senior 
appraisal 
(included  in  DGEs  for  article  43, 
transition 
senior 
management  appraisal)  foreseen  by 
May 2004. 

rules 

for 

Draft  Commission  Decision 
on middle management 

31/10/2000 

Commission  Decision  on 
Middle Management 

30/4/2001 

23 

Creation of a training Centre 

Results  of  consideration  of 
creation of training centre 

31/7/2000 

Consultative Communication 
Management) 
(Middle 
28/2/2001 
adopted 
SEC(2001)322. 

Final  orientations  adopted  by 
the Commission on 30/10/2001 
SEC(2001)1697/6 - 1697/7 

Significant  increase  in  number 
of  training  days  in  2001  (+ 
100% compared to 2000) 

Consultative document for a Decision 
on  Middle  Management  approved  by 
the college on 14.01.2004. 

Agreement 
Secretaries 
between 
General of the Institutions to establish 
a  European  Administrative  School 
and  draft  Decision  to  set  up  the  EAS 
approved on 28.10.2003. Consultative 
and  decisional  process  has  begun  on 
that  basis.  School  expected  to  be 
operational from beginning 2005. 

Management training 

-  No  specific  WP  milestone 
originally foreseen. 

Additional 
training implemented 

management 

the  beginning  of  2003  an 

Since 
independent evaluation of 

Management training at Head of Unit 
level and above has been conducted. 

32 

√ 

√ 

 
 
  
 
 
 
 
 
 
 
 
 
 
24- 

Recruitment policy  

29 

Draft  Agreement  on 
creation 
of 
Institutional 
office 

the 
an 
Inter-
recruitment 

31/12/2000 

- 

Consultative 
Communication 
recruitment policy 

31/12/2000 

on 

(Commission Decision) 

Proposal  to  the  Staff  Regs 
committee 

30/6/2001 

Proposal 
(Staff Regulations) 

to 

the  Council

30 

New career system 

Consultative 
Communication  on  new 
career system 

31/12/2001 

30/11/2000 

Commission Decision 

31/12/2001 

Proposal  to  the  Staff  Regs 
committee 

31/5/2001 

- 

- 

- 

- 

- 

33 

EPSO operational since January 2003. 

European  personnel  selection 
offices  (EPSO)  established  by 
decision  of  the  institutions,  OJ 
L197, 26 July 2002 

Consultative Communication 
adopted 
28/2/2001 
SEC(2001)294. 

Agreement on common inter-
institutional  principles 
for 
recruitment  adopted  on  25 
July 2002 

-  No  changes  to  the  Staff 
Regulations were necessary 

-  No  changes  to  the  Staff 
Regulations were necessary 

Consultative Communication 
adopted 
28/2/2001 
SEC(2001)337. 

Legal  proposal has  been  submitted  to 
Council 
and  EP.  Negotiations 
ongoing. 

for 

training 

Implementing rules concerning access 
to 
the  ‘certification’ 
procedure  are  due  to  be  adopted  by 
December  2004.  A  Commission 
the 
Decision  on 
context  of  the  reform  of  the  Staff 
Regulations  is  due  to  be  adopted  in 
March 2004 

‘attestation’ 

in 

√ 

√ 

Final  orientations  adopted  by 
the Commission on 30/10/2001 
SEC(2001)1697/6 - 1697/7). 

Done January 2002. 

 
 
  
 
 
 
 
 
 
 
 
Proposal 
(Staff Regulations) 

to 

the  Council

31/12/2001 

April 2002 

Adopted 24 April 2002 

31 

Simplification of grading procedures 

Draft  Commission  Decision 
on grading procedures 

31/7/2000 

Commission  Decision  on 
grading procedures 

30/11/2000 

- 

- 

(Proposal  to  the  Staff  Regs 
committee)  

- 

Proposal 
(Staff Regulations) 

to 

the  Council 

32-33 

New  staff  appraisal  system  &  Promotion 
based on merit 

Draft  Commission  Decision 
on  an  annual  staff  appraisal 
system 

Commission Decision on an 
appraisal 
staff 
annual 
system 

30/11/2000 

- 

31/5/2001 

April 2002 

Implementation 

2002 

2002/2003 

34 

Flexible retirement 

Consultative 
Communication  on  flexible 
retirement 

31/12/2000 

Consultative 
Communication  on  specific 
retirement 
for 
enlargement 

scheme 

31/12/2000 

- 

- 

34 

Decision on changing the Staff 
Regulations taken. 

- 

Done January 2002. 

Adopted 24 April 2002 

Consultative Communication 
adopted 
28/2/2001 
SEC(2001)319. 

Consultation 
Regulations 
finalised. 

of 
Staff 
Committee 

rules 

General 
for 
implementing Art. 43 and 45 
(appraisal  and  promotion) 
adopted  by  the  Commission 
on 26 April 2002 

18/7/2001 

Consultative Communication 
adopted 
SEC 
(2001)1207 (incorporating new 
regulatory 
for 
enlargement  schemes  (see  also 
Action 62). 

framework 

has 

Simplified 
been 
grading 
introduced  in  the  Staff  Regulations 
“Global 
(see 
Package” 
30/10/01).  Legal 
proposal  has  been  submitted  to  EP 
and Council. Negotiations ongoing.  

Communication 

of 

First  new  appraisal  and  promotion 
exercise  carried  out  in  2003  within 
foreseen deadlines.  

New implementing rules for article 45 
in 
of  Staff  Regulations  adopted 
January 2004. 

√ 

√ 

Legal  proposal has  been  submitted  to 
Council 
and  EP.  Negotiations 
ongoing. 

√ 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
Proposal  to  the  Staff  Regs 
committee 

31/5/2001 

- 

Done January 2002. 

Proposal 
(Staff Regulations) 

to 

the  Council

31/2/2001 

April 2002 

Adopted 24 April 2002 

35 

Access to career guidance 

Creation  of  central  career 
guidance function 

31/12/2000 

Creation  of  decentralised 
career guidance system 

31/7/2001 

New version of SYSPER 

31/12/2003 

2004 

Central  career guidance  unit 
established 1/9/2000 

Career  guidance  system  is 
now operational. 

SYSPER  II  operating  with 
several  modules  available  and 
more to follow.  

√ 

36 

Encouraging mobility 

- 

(Commission  Decision  on 
mobility) 

(Proposal  to  the  Staff  Regs. 
Committee) 

(Proposal 
(Staff Regulations)) 

to 

the  Council 

- 

- 

- 

- 

- 

Consultative  Communication 
on 
adopted 
mobility 
28/2/2001 SEC(2001)325.  

Guidelines for internal mobility 
adopted 
12/02/2002 
on 
SEC(2002) 146. 

Mobility  introduced  for  all  sensitive 
posts, including middle management. 

√ 

Done January 2002. 

Adopted 24 April 2002 

April 2002 

37 

Inadequate performance 

Consultative  Communication 
on professional incompetence 

31/10/2000 

- 

Implementation 
Warning System 

of  Early 

31/12/2000 

35 

Consultative  Communication 
adopted 
28/2/2001 
SEC(2001)279.  

Early  warning 
system:  Special 
performance  plan  foreseen  in  case  of 
insufficient  markings  in  the  career 
development report.  

√ 

Integrated  in  general  rules 
for  implementing  Articles  43 
and 45. (see action 33) 

Legal proposal has been submitted to 
and  EP.  Negotiations 
Council 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proposal  to  the  Staff  Regs 
Committee 

30/4/2001 

 Done January 2002. 

ongoing. 

Proposal 
(Staff Regulations) 

to 

the  Council

31/12/2001 

April 2002 

Adopted 24 April 2002 

38 

Promoting a learning culture  

- 

- 

- 

Commission  Decision  on 
Training Guidelines 

31/7/2000 

April 2002 

training 

Consultative  Communication 
guidelines 
on 
28/2/2001 
adopted 
SEC(2001)323.  

Final  orientation  adopted  by 
the Commission on 30/10/2001 
SEC(2001)1697/6.Commission 
decision  on  training  guidelines 
adopted  on  7  May  2002 
C(2002) 729 

No  changes  to  the  Staff  Regulations 
necessary. 

Training Day held on 27.11. 2003 to 
raise  awareness  among  managers 
and staff of the content and potential 
of Commission training courses. 

39 

Supporting the reform process 

Report  on  necessary  training 
action linked to the Reform 

31/11/2000 

- 

in 

Training  has  been  organised  in 
the  areas  of 
particular 
Financial 
Management 
(internal  and  external)  and  the 
policy. 
new 
Reporting  done  via  annual 
reports of Training Office.  

personnel 

40 

Integrating  training  with  other  areas  of 
human resource management 

-  No  specific  WP  milestone 
consultative  document 
or 
originally 
See 
foreseen. 
Action 38. 

Ongoing 

- 

- 

36 

√ 

√ 

√ 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
41 

Reform of language training 

Phasing  of  new  approach  to 
language training 

30/9/2000 

- 

42 

New officials training programme 

Proposal  for  new  officials’ 
programme  (over  a  new  12 
month probationary period)  

31/10/2000 

- 

43 

Increase training budgets 

Increases  in  training  budget 
2001-2003 

- 

Report 
increase 
activities 

on  measures 

31/10/2000 

internal 

to 
training 

44 

Multiannual 

a) 
for 
transformation  of  credits  into  permanent 
posts  

programme 

Multiannual 

b) 
of 
transformation  of  temporary  posts  into 
permanent posts 

programme 

2001  Budget 
– 
-> permanent posts  

credits

31/12/2000 

2001  budget  – 
permanent posts 

temp 

-> 

31/12/2000 

c) Amendment of Commission decision on 
Seconded National Experts (DNE) 

Draft  Commission  Decision 
on DNEs  

30/11/2000 

- 

- 

- 

- 

- 

37 

to 

New "survival courses" for EN 
and  FR  have  been  developed 
especially  for  newcomers  who 
have 
quickly 
become 
operational.  A  similar  reform 
of  the  pedagogy  (in  order  to 
relate 
language  courses 
closer to  the  working  needs)  is 
planned  also  for 
the  other 
languages.  

the 

decision 

rules 
Commission 
relating 
language 
training  is  due  to  be  adopted  in 
March 2004. 

to  access 

on 

to 

New  requirement 
to 
Regulations 
competence 
in  a 
before first promotion.  

in  draft  Staff 
demonstrate 
language 

third 

inter-Institutional 

Certain  modules  to  be  organised  on 
from 
an 
1.5.2004 
the  European 
Administrative School. 

through 

level 

Since  2000  DG  ADMIN  publishes 
detailed  annual  reports  on  training  , 
covering  all  central  -general  and 
linguistic- 
in 
Brussels and Luxembourg. 

training  organised 

Original  White  Paper  action 
replaced  by  new 
induction 
programme,  implemented  from 
late 2002.  

2001 

The budget for general training 
in 
doubled 
almost 
compared  with  2000.  The 
budget  for  2004  was  increased 
by 37% compared with 2003.  

100  conversions  of  credits 
into  permanent  posts  were 
agreed in the 2001 budget.  

90  conversions  of  temporary 
into  permanent  posts  were 
agreed in the 2001 budget. 

Consultative  Communication 
adopted 
28/2/2001 
SEC(2001)295. 

√ 

√ 

√ 

√ 

 
 
  
 
 
 
 
 
 
Commission  Decision  on 
DNEs 

31/5/2001 

April 2002 

d) Recruitment of temporary agents 

Draft  Commission  Decision 
on temporary agents 

30/11/2000 

- 

Commission  Decision  on 
temporary agents 

31/5/2001 

Final Decision adopted by the 
Commission  on  30  April 
2002. C( 2002)1559 

Consultative  Communication 
28/2/2001 
adopted 
SEC(2001)295. 

abandoned 

proposal 

Commission 
for 
modifications to the Staff Regulations 
foresees  the  creation  of  a  “contract 
agent”. Decision on temporary agents 
abandoned 
the 
the 
Commission proposal. 

light  of 

in 

e) Phasing out of all other contractual staff 
on core tasks 

Phasing  out  of  all  other 
contractual staff on core tasks 

31/12/2002 

- 

- 

Ongoing 

process. 

45 

Use  of  non-permanent  staff  for  non-core 
activities 

Draft  Code  of  Conduct  for 
external personnel  

30/11/2000 

No  consultative  document 
originally foreseen. 

Consultative  Communication 
staff 
on 
non-permanent 
adopted 
28/2/2001 
SEC(2001)295 

Final  orientation  adopted  by 
the Commission on 30/10/2001 

SEC(2001) 1697/6-1697/7 

Fast  track  Decision  on  3 
years  contract  for  auxiliaries 
adopted on 18/3/2002 

Commission  Decision 
ENDs 30.04.2002.  

on 

In light of the political agreement on 
the  Staff  Regulations 
to  replace 
auxiliaries  by  contract  staff,  a  major 
overhaul  of  the  code  of  conduct  has 
become 
necessary.  Commission 
decisions  on  the  tasks  of  and  time 
limits  for  non-permanent  staff  will 
have  to  be  adopted  by  1st  May  2004, 
the  foreseen  date  of  entry  for  entry 
into 
the  new  Staff 
Regulations.  Drafts  have  already 
undergone interservice consultation. 

force  of 

√ 

38 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
Commission 
adopting 
Conduct 
personnel 

new  Code 

for 

Decision 
of 
external 

31/5/2001 

46 

Examine 
Regulations for non-permanent staff 

the  need 

to  change  Staff 

Examination  of  need 
change the Staff Regs 

to 

31/12/2000 

(Proposal  to  the  Staff  Regs 
Committee) 

Proposal 
(Staff Regulations) 

to 

the  Council

- 

- 

- 

- 

Consultative  Communication 
adopted 
28/2/2001 
SEC(2001)295 

New  “Contract  Agent”  for  non  core 
tasks executed by agencies or offices 
proposed.  Legal  proposal  submitted 
to Council and EP.  

√ 

Done January 2002. 

April 2002 

Adopted 24 April 2002 

Replacement  of  Auxiliaries  by  time 
limited  Contract  Agents  agreed  in 
the  Staff 
context  of  reform  of 
Regulations.  

A new decision on time limitations for 
non-permanent  staff  is  due  to  be 
adopted in April 2004. 

New  implementing  rules  on  tasks  for 
non  permanent  staff  are  due  to  be 
adopted by April 2004. 

Legal proposal has been submitted to 
Council 
and  EP.  Negotiations 
ongoing. 

√ 

47-51 

Equal opportunities 

the 

Commission  approves  'Targets 
for 
and 
appointment  of  women  2000' 
(12/5/2000) C(2000)1071. 

recruitment 

Consultative  Communication 
on equal opportunities 

31/10/2000 

- 

Consultative 
Communications 
29/11/2000 
SEC(2000)2084.  

adopted 
SEC(2000)2085 

Implementation  of  the  Commission 
orientations  of  31/10/2002  ongoing. 
long-term  actions  will  be 
Some 

39 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commission Decision 

- 

May 2002 

Final 
30/10/2001. 

Orientation 

on 

included in the 4th action programme 
for  equal  opportunities  for  men  and 
women at the European Commission. 

Proposal  to  the  Staff  Regs 
Committee 

31/5/2001 

Done January 2002. 

Proposal 
(Staff Regulations) 

to 

the  Council

31/12/2001 

April 2002 

Adopted 24 April 2002 

Guidelines  on  Moral  Harassment 
were  adopted  in  the  context  of  a 
Communication 
the 
Commission’s  policy  on  moral 
harassment of 22.10.2003.  

concerning 

A  Commission  Decision  on  flexitime 
is  foreseen  to  be  adopted  in  April 
2004. 

52 

A more service-oriented DG ADMIN 

Creation of a Customer Panel 

31/7/2000 

- 

Customer 
23/10/2000. 

panel 

created 

√ 

Commission Decision on role 
of DG Admin 

28/2/2001 

 April  2002  and 
October 2002 

Commission  Decision  taken 
on 6.11.02  

53 

Reconciling professional & private lives 

Consultative  Communication 
on home / work life balance 

31/10/2000 

- 

Consultative  Communication 
adopted 
31/10/2000 
SEC(2000)1806.  

Legal proposal has been submitted to 
Council 
and  EP.  Negotiations 
ongoing 

√ 

Commission  Decision  on 
home/work life balance 

- 

Proposal  to  the  Staff  Regs 
Committee 

31/5/2001 

Final  orientations  adopted  by 
the Commission on 30/10/2001 
SEC(2001)1697/6 - 1697/7. 

Done January 2002. 

40 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
Proposal 
(Staff Regulations) 

to 

the  Council

31/12/2001 

April 2002 

Adopted 24 April 2002 

54 

Social policy  

Consultative  Document  on 
social policy 

31/10/2000 

- 

(Commission  Decision  on 
social  policy  and  possible 
proposal  to  the  Staff  Regs 
Committee) 

- 

Consultative  Communication 
28/2/2001 
adopted 
SEC(2001)284. 

Decision March 2002. 

aspects  of 

Joint  agreement  between  the  OSPs 
and  the  Commission  on  the  Social 
Welfare 
its  human 
resources  for  Commission  staff  and 
action  plan  for  provision  of  facilities 
and  services  for  Commission  staff 
(C 
adopted  on  4  March  2002 
2002/842). 

 √ 

Legal proposal has been submitted to 
Council  and  EP  in  May.  Negotiation 
ongoing. 

55 

Clear rules applied in a clear way 

Staff Regs etc on-line 

31/7/2000 

- 

Results 
of 
administrative procedures 

review 

of 

31/12/2000 

- 

56 

Examination  of  Staff  Regulations 
remove outdated rules 

to 

Examination of Staff Regs 

31/12/2000 

- 

Proposal  to  the  Staff  Regs 
Committee 

31/5/2001 

41 

An Action plan on a new partnership 
with  retired  officials  is  foreseen  for 
adoption in the form of a Commission 
Decision in September 2004.  

Implementation 
ongoing. 

of 

action 

plan 

Legal proposal has been submitted to 
Council 
and  EP.  Negotiations 
ongoing. 

√ 

√ 

Staff 
published 
1/12/2000. 

Regulations 
on 

etc 
intranet 

Action  Plan  for  simplification 
and  transparency  in  personnel 
policy  was  adopted  in  August 
2001. 

Done  (Working  Document  : 
“General Review’ approved on 
basis 
Commission 
of 
orientation of 18/07/2001) 

Done January 2002. 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proposal 
(Staff Regulations) 

to 

the  Council

31/12/2001 

April 2002 

Adopted 24 April 2002 

57-58 

Discipline 

Consultative  Communication 
on discipline 

31/10/2000 

- 

Commission  Decision  on 
administrative improvements 

30/4/2001 

Proposal  to  the  Staff  Regs 
Committee 

30/4/2001 

Consultative  Communication 
adopted 
29/11/2001 
SEC(2000)2079.  

Decision 
adopted 
19/2/2002 C(2002) 540. 

on 

Legal proposal has been submitted to 
Council 
and  EP.  Negotiations 
ongoing. 

Done January 2002. 

Proposal 
(Staff Regulations) 

to 

the  Council

31/12/2001 

April 2002 

Adopted 24 April 2002 

59 

Whistleblowing  (rights  &  obligations  for 
reporting) 

Consultative  Communication 
on whistleblowing 

31/10/2000 

- 

Consultative  Communication 
adopted 
29/11/2000 
SEC(2000)2078.  

Proposal 
Institutional agreement 

for 

an 

Inter-

31/10/2000 

- 

Abandoned. 

Commission Decision 

31/3/2001 

(Proposal  to  the  Staff  Regs 
Committee) 

(Proposal 
(Staff Regulations)) 

to 

the  Council

- 

- 

Commission  Decision  to  be 
adopted on 4 April 2002 

C (2002) 845 

Done January 2002. 

April 2002 

- 

42 

to 

No  changes 
the  Staff  Regs 
originally  foreseen  but  now  being 
proposed.  Legal  proposal  has  been 
to  Council  and  EP. 
submitted 
Negotiations ongoing 

√ 

√ 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
60 

Creation of a central mediation service 

- 

- 

of 

Creation 
mediation 
(Commission Decision) 

a 

central 
service 

31/12/2000 

61 

Proposed approach to pay & pensions 

Extend existing Method 

30/6/2000 

- 

(Proposal  to  the  Staff  Regs 
Committee) 

- 

- 

- 

- 

- 

Consultative  Communication 
on mediation service adopted 
18/7/2001 
SEC(2001)1109
SEC(2001)1201. 

Decision adopted on 4 March 
2002 C 2002/601. 

Regulation adopted (Council) 
18/12/2000 
roll 
over). OJ L326 (22/12/00). 

(two  year 

Consultative  Communication 
on  pay  &  pensions  adopted 
28/2/2001 SEC(2001)274. 

Done January 2002. 

Proposal 
(Staff Regulations) 

to 

the  Council

31/12/2001 

April 2002 

Adopted 24 April 2002 

Legal proposal has been submitted to 
Council 
and  EP.  Negotiations 
ongoing 

Modernisation  of  pension  system 
agreed  in  context  of  reform  of  the 
Staff Regulations.  

62 

Review of resources implications of reform 
& policy action 

PDB 2001 

30/4/2000 

Commission Decision on 200 
‘Reform’ posts 

31/5/2000 

Commission Communication 

30/9/2000 

Letter of amendment adopted 
1/9/2000. 

Communication 
12/7/2000 SEC(2000)1142. 

adopted 

Communication 
26/7/2000 
COM(2001)50. 

adopted 
SEC(2000)2000 

- 

- 

- 

43 

√ 

√ 

√ 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
63 

Description  of 
financial actors 

the 

responsibility  of 

Commission  Decision  on 
Financial Reform package 

31/5/2000 

64 

Delegation of powers 

65 

Suppression of centralised ex-ante visas 

Commission  Decision  on 
the 
Internal  Rules 
Execution of Budget 

on 

31/3/2001 

Proposal 
to 
(Financial Regulation) 

the  Council 

30/4/2000 

- 

- 

- 

Communication 
13/12/2000 SEC(2000)2203. 

adopted 

Charter  of  the  Accounting  Officer 
and 
Internal  Auditor 
operational. 

the 

of 

Communication 
2/4/2001 SEC(2001)454. 

adopted 

Charter  for  Authorising  Officers  by 
sub-Delegation 
Delegation 
operational. 

& 

Communication 
26/7/2000 COM(2000)461. 

adopted 

Council Regulation 25/06/02. 

66 

Financial Irregularities Panel 

Commission  Decision  on 
setting-up Panel 

30/6/2000 

- 

New  Financial  Regulation  of 
June 2002.  

Commission 
C/2003/2247 of 9 July 2003 

decision 

67 

Financial  liability  governed  only  by  the 
Staff Regulations 

Proposal 
to 
(Financial Regulation) 

the  Council 

30/4/2000 

- 

New  Financial  Regulation 
adopted June 2002.  

A Commission Communication on the 
implementation  of  Article  22  Staff 
Regulations  (financial  liability)  has 
been 
Consultations 
ongoing. 

prepared. 

68 

Setting up of an Internal Audit Service 

Setting up of the IAS 

31/5/2000 

- 

69 

Reporting & Planning of the IAS 

Internal  &  Forward  Audit 
Plans 2001-2003 

31/12/2000 

- 

Communications 
21/6/2000 
and 
SEC(2000)1801. 

adopted 
SEC(2000)1354
31/10/2000 

IAS operational on 15/9/2000. 

Internal & Forward Audit Plans 
regularly  transmitted  to  Audit 
Progress Committee and DGs 

44 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

 
 
  
 
 
 
 
 
 
Annual Internal Audit Report 
2000 

31/3/2001 

70 

Separation  of  internal  audit  from  financial 
control 

to 

Proposal 
the  Council 
(Financial  Regulation  –  fast-
track procedure) 

30/4/2000 

- 

71 

An Audit Progress Committee (APC) 

Commission  Decision  on 
setting up of APC 

- 

72 

Creation of a Central Financial Service 

Commission  Decision  on 
setting up CFS 

31/5/2000 

Creation of CFS intranet site 

30/6/2001 

- 

- 

- 

73 

Advice on contracting 

of 
Creation 
Contract Unit in DG Budget 

a  Central 

30/6/2000 

Annual  Internal  Audit  Report 
for  2000/2001/2002  taken  note 
of 
on 
3/7/2001,24/7/2002 
and 
9/72003. 

Commission 

by 

adopted 
Communication 
24/5/2000 
COM(2000)693; 
Regulation adopted (Council) 
9/4/2001 
and 
OJ  L111 
decision  adopted  on  3/7/2001 
SEC(2001)1007 final. 

(20/4/01) 

Communication 
31/10/2000 SEC(2000)1808. 

adopted 

Communication 
1/5/2000 SEC(2000)560. 

adopted 

Site created October 2000.  

Unit created 1/2/2001. 

First  package  of  standard 
contracts/agreements 
adopted in December 2003 

Separation  of  the  Services  became 
effective  on  4  July  2001  (SEC 
(2001)1077). 

package 

Second 
standard 
contracts/agreements  will  be  adopted 
in the first half of 2004. 

of 

√ 

√ 

√ 

√ 

74 

Contracts database 

Temporary 
Database operational 

Contracts 

30/6/2001 

Second  half  of 
2004 

Prototype  contract  database 
operational 30/6/2001. 

 Contractors database and linked data 
base for the contracts will be finalised 

- 

45 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
Decision  on  configuration  of 
a definitive database 

30/6/2001 

Done in context 
of 
accounting 
reform 

Construction  and 
version 4, 5 and 6. 

tests  of 

in 2004.  

75 

Operational  manuals 
management 

for 

financial 

Issue of manuals  

30/11/2000 

Administrative  and  Technical 
Vademecum 
Assistance 
adopted 
13/11/2001 
SEC(2001)1728. 

Expenditure  life  cycle  manual 
has been put on the Web on 17 
December 2001. 

Unique  site  for  all  financial  issues 
available  in  BudgWeb  Vade-mecum 
on  Public  Procurement  provided  to 
services in November 2003. 

76 

Contracts & grants 

Proposal 
to 
(Financial Regulation) 

the  Council 

30/4/2000 

- 

Proposal  adopted  26/7/2000 
COM(2000)461. 

77 

User networks 

Establishment  of  Working 
Groups 

31/12/2000 

- 

78 

Minimum standards for internal control 

Draft Commission Decision 

30/6/2000 

- 

46 

Council  Regulation  adopted 
on 25 June 2002. 

1)  RUF  (Réseau  des  unités 
financières, 
of 
financial units) 

Network 

Internal 

2) 
control 
coordinators network created 
in 2003 

(both 
monthly) 

groups 

meeting 

Gradual implementation for the 
financial part in the first half of 
2001.  

√ 

√ 

√ 

√ 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
Commission Decision 

30/9/2000 

- 

Communication 
13/12/2000 SEC(2000)2203. 

adopted 

80 

81 

82 

83 

84 

79 

Segregation of duties & financial circuits 

Internal 
duties 

reorganisation  of 

31/12/2000 

Evolution  of  the  role  of  Finance  Units  in 
DGs 

Change in the role of finance 
units 

31/12/2000 

Strengthening  the  role  of  the  DGs’  control 
function (Audit Capability) 

Establishment  of 
Internal 
Audit  Capabilities  in  each 
Service 

31/12/2000 

Declaration  by  the  Director  general  in 
her/his Annual Activity Report  

- 

- 

version 

New 
21/12/2001 SEC(2001)2037. 

adopted 

on 

version 

 New 
in 
September  2002  related  to  the  new 
FR. 

established 

- 

- 

- 

- 

Communication 
13/12/2000 SEC(2000)2203. 

adopted 

Communication 
13/12/2000 SEC(2000)2203. 

adopted 

Communication 
31/10/2000 SEC(2000)1803. 

adopted 

Annual Reports done in 2002 

√ 

√ 

√ 

√ 

First annual activity report 

31/1/2001 

1/5/2002  

Communication 
COM(2002)426  final  adopted 
24/7/2002. 

 Yearly  process  as  established 
Article 60 (7) FR 

in 

Adequate levels of staffing 

Amalgamated into Action 62. 

See Peer Group review conclusions. 

√ 

Review  &  assessment  of  current  internal 
controls & financial processes 

Describe current systems 

30/4/2000 

- 

31/5/2000 

Description  of  current  systems 
completed 
and 
updated  in  2002  in  order  to 
in 
integrate  new  elements 
accordance with the new FR. 

√ 

Self-assessment 

30/9/2000 

47 

rounds 

Yearly 
self-
assessment  exercise  completed 
since 2001  

of 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
85 

Design  of  adequate  internal  controls  & 
financial processes 

Definition of control model 

30/9/2000 

Changes 
charts 

in 

organisation 

31/12/2000 

Compliance 
minimum standards 

with 

all 

30/6/2001 

86 

Deconcentration of financial controllers 

- 

- 

- 

- 

- 

- 

Decisions  made  on  model 
1/9/2000. 

Organisational 
changed 1/10/2000. 

charts 

Summary  report  adopted  by 
the Commission on 7/11/2001. 

Communications  adopted  on 
financial 
reorganisation  of 
12/7/2000 
control 
SEC(2000)1146 
& 
SEC(2000)1142  &  25/4/2001 
SEC(2001)618.  

Deconcentration 

31/8/2000 

- 

87 

Review made by Commission’s services in 
the change process 

review 

IAS 
reform 
progress  in  implementation 
of internal control in DGs.  

of 

review 

IAS 
management  & 
systems 

of  DGs’ 
control 

31/3/2001 

Completed 26/3/2001. 

31/12/2002 

31/09/2004 

Delay  by  one  year  of  in-depth 
audits due to knock on effect of 
decision  to  postpone  by  one 
year  the  DGs’  first  round  of 
assurance statements 

√ 

√ 

√ 

Physical deconcentration completed.  

IAS 
review  of  DGs’  process 
assurance 
their 
underlying 
declarations  of  May  2002  completed 
in July 2002. 

Cycle of DG-specific in-depth audits 
started in July 2002, to be completed 
by December 2003, but delayed until 
2004  because  of  special  Eurostat 
audit.. 

88 

Financial Control DG & IGS 

Commission  Decision  on  the 
abolition  of  the  Inspection 
Generale des Services (IGS) 

30/4/2000 

- 

Communication 
18/04/2000 (PV(2000)1475). 

adopted 

48 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
Commission  Decision  on  the 
abolition  of  DG  Financial 
Control 

following 
recasting 
Financial 
Regulation 

of 

31/12/2002 

New  Financial  Regulation  of 
June 2002 and APS 2003 

89 

Consultation  of  Advisory  Committee  on 
Procurement & Contracts (ACPC) 

Commission  Decision  on 
new implementing rules 

30/6/2000 

Communication 
15/11/2000 
SEC(2000) 1890. 

adopted 

adopted 
Regulation 
228 
21/08/2001  OJ 
L 
(24/08/01)  and  has 
taken 
effect on 31/08/01. 

90 

91 

Assessment of Human Resources needs for 
financial management & control 

a)  Training  on  principles  of  the  new 
Commission's financial system 

Amalgamated into Action 62 

See Peer Group Conclusions. 

31/7/2001 

Initial Training finalised end of 
in 
2000.  Now 
continuous training schemes. 

integrated 

b) Training on 'value for money' 

Provide  in-depth  training  in 
financial organisation 

30/6/2001 

- 

Training  had  been  on  offer 
during 2002/2003  

c)  Training  on  budgetary  &  financial 
management 

31/7/2002 

- 

Ongoing activity.  

92 

Guidelines for sound project management 

Guidelines Communication 

31/12/2000 

June 2002 

93 

Better co-ordination of interaction between 
OLAF & other services 

Memorandum 
of 
Understanding of OLAF with 

31/12/2000 

June 2002 

Administrative  Guide  adopted 
in  October  2003  incorporating 
draft  guidelines  prepared  by 
OLAF. 

Provisional  Memorandum  of 
understanding  signed  between 
OLAF and central Commission 

49 

91c Ongoing, financial training forms 
an  integral  part  of  Commission's 
training programme. In October 2003 
a  DG  Admin  survey  inquired  about 
new and emerging training needs and 
additional  courses  are  offered  during 
2004  

 Further  discussions  on  amended 
OLAF Regulation are underway 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
other services  

services. 

94 

Fraud “proofing” of legislation & contract 
management 

Commission Decision on risk 
assessment procedures 

From  May 
2000 onwards 

Ongoing 

Communication 
concerning 
fraud  proofing  of  legislation 
and  contract  management 
adopted on 7 November 2001
SEC(2001) 2029 final. 

 As  regards  the  follow-up  of  the 
communication as far as legislation is 
concerned, a specific working-group, 
chaired by OLAF has beencreated. A 
follow-up 
the  whole 
regarding 
communication is foreseen within the 
framework  of 
the  Commission 
annual  report  on  the  fight  against 
the 
the  protection  of 
fraud  and 
Communities’ financial interests . 

√ 

95 

Optimisation of Early Warning System 

Commission  Decision  on 
optimisation of EWS 

31/7/2000 

- 

Communication 
31/10/2000 SEC(2000)1811. 

adopted 

Revision  of  the  system  adopted  on  3 
February 2004(C(2004)193final). 

√ 

96 

More effective management of recovery of 
unduly paid funds 

Redefinition 
of 
responsibilities and setting up 
an 
staffed 
adequately 
organisational structure  

31/7/2000 

-30/06/2002 

97 

98 

Improved financial monitoring and control 
of Structural Funds 

New 
monitoring Structural Funds 

procedures 

on 

31/7/2000 

31/12/2000 

Simplified 
EAGGF (FEOGA) 

clearance 

procedure 

for 

Statistical 
recommendations 

review 

& 

30/6/2000 

50 

Communication  adopted  on 
the improvement of recovery, 
03/12/2000 
COM(2000)671 
final. 

for 

Revision  and  consolidation  of 
internal  procedures 
the 
recovery  of  debts  arising  from 
the 
direct  management  and 
recovery of fines on 17.12.2002 
(C(2002)5048/4) 

Communication  provides  the 
improvement  of  the  roles  of 
the different actors. 

Memorandum  adopted  on  14 
August 2001, C (2001) 2517 

Communication adopted on 5 
September  2001,  SEC  (2001) 
1921- 

√ 

√ 

√ 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
Action 

Objective 

State of play in January 2004 

State of play in 01.01.04 of outstanding actions as at 01.01.03 

ANNEX 2 

9a 

9b 

11 

changes 

Propose 
legislative 
framework allowing use of electronic means 
for public procurement and transactions 

to  EU 

Completed. 

- Text of procurement Reform agreed in Conciliation Committee on 9.12.2003. 

Review  of  internal  practices  and  internal 
use of electronic signatures 

Not completed. 

The  internal  project  plan  has  been  set  up  and  a  prototype  has  been  launched  for  electronic  collection  and 
dissemination of procurement notices (eTendering by OPOCE) 

Make  central  invoice  register  available  to 
services 

Almost completed. 

The Central Invoice Register is now deployed in 15 services. In order to complete the implementation of action 
11 of the White paper all Commission services have been requested to gradually introduce the Central Invoice 
Register, unless a local IT system meets the same objective of registering claims on receipt, and of monitoring 
the  respect  of  payment  delays.  The  use  of  the  "ABAC-Invoices",  (with  all  the  requirements  for  accrual 
accounting)  which  will  replace  the  Central  Invoice  Register  will  be  mandatory  before  the  end  of  2004  for  all 
services. Work of the activities and timetable to fully integrate the activities of Community Delegations in third 
countries is ongoing. 

18  

Simplification of administrative procedures 

Completed. (Inherently ongoing process, e.g. recently commenced work on empowerments in the Relex area to 
be concluded shortly). 

22 

35 

Introduction of appraisal for A1s and A2s 

Completed. A pilot scheme was undertaken and the legal base is contained in the revised staff regulations to enter 
into force on 1 May 2004. Final approach to be implemented then. 

Provide access to career guidance 

Completed.  Central  career  guidance  service  is  available  for  officials,  IT  tools  to  support  career  guidance 
(SYSPER II) are available, in particular with regard to job descriptions and will be developed further 

51 

 
 
  
 
 
 
 
 
42 

New officials training programme 

Completed. Plans for extended and comprehensive induction training for newcomers set out in the White Paper 
were  adjusted.  A  new  induction  programme  was  implemented  as  from  late  2002  comprising  compulsory  and 
optional modules depending on individual needs, e.g. financial training for newcomers in a financial management 
role. 

45 

Use  of  non-permanent  staff  for  non-core 
activities 

Completed. In light of the political agreements on the Staff Regulations to replace auxiliaries by contract staff, a 
major  overhaul  of  the  code  of  conduct  has  become  necessary.  Commission  decisions  on  the  tasks  of  and  time 
limits for non-permanent staff will have to be adopted by 1 May 2004. Drafts have already undergone interservice 
consultation. 

66 

Financial Irregularities Panel 

Completed. By decision C/2003/2247 of 9 July 2003 , the Commission set up the Financial Irregularities Panel 
foreseen in Article 66 (4) of the Financial Regulation, which functions independently and is charged to determine 
whether  a  financial  irregularity  has  occurred  and  what  the  consequences  should  be.  The  Panel  will  become 
operational in the coming months as soon as the president of the Panel and its members are appointed. 

74 

Contracts database 

Not completed. 

In  the  framework  of  the  setting  up  of  the  Commission's  modernised  accounting  system  (ABAC)  it  has  been 
decided  to  create  one  data  base  for  data  relating  to  the  contractors  (third  party  file  (FEL))  which  will  be 
constructed  during  2004  and  a  linked  data  base  for  the  contracts  which  will  be  called  ABAC-Contracts.  The 
development of the latter will also be finalised in the first half of 2004. From that moment on, the services will 
start to collect all the data necessary to feed this data base.  

92 

93 

Guidelines for sound project management 

Completed. Administrative guide adopted in October 2003 incorporated draft guidelines prepared by OLAF 

Better  coordination  between  OLAF  and 
other services 

Completed.  Memoranda  of  understanding  signed  between  OLAF  and  Internal  Audit  Service,  Investigation  and 
Disciplinary Office (IDOC) and Secretariat General. Information flows determined in the context of the Eurostat 
action plan (see section 3.1). A separate legislative proposal is being made to review the OLAF Regulation 

52 

 
 
  
 
 
ANNEX 3 

The work of interservice policy-coordination groups in 2003 

Four  permanent  high-level  interservice  groups  operate  presently,  each  with  different 
composition  and  mission,  to  ensure  consistency  in  the  implementation  of  the 
Commission’s administrative Reform. 

The ABM Steering Group, a major co-ordinating mechanism created by the Reform, is 
chaired  by  the  Secretary-General  and  includes  the  Director-General  of  DG  Budget,  the 
Director-General  of  DG  Personnel  and  Administration  and  the  Heads  of  cabinet  of  the 
President, of the Vice-President responsible for the Reform and of the Commissioner for 
Budget. The initial mandate of the ABM Steering Group was limited to the issues related 
to  Activity-based  management.  By  decision  of  2 October 200214,  the  Commission 
extended the group’s mandate to the co-ordination of all questions related to the Reform 
that have a political or strategic character. 

In  2003,  the  ABM  Steering  Group  met  10  times.  The  main  results  achieved  over  this 
period include: the central co-ordination and the definition of orientations on the strategic 
issues related to the 2004 Annual Policy Strategy and the Synthesis of the 2002 annual 
activity report; the Preliminary draft budget 2004; the decision to launch a study on the 
IT-tool supporting activity-based management  in order to improve interoperability  with 
other corporate systems and increase the user friendliness of the tool for the managers; 
the  adoption  of  the  necessary  improvements  concerning  the  monitoring  of  the 
management  plans  by  the  Commission's  services;  and  the  decision  on  allocation  of  the 
human resources for 2004. 

The  Directors  General  Group  is  chaired  by  the  Secretary  General  and  meets  once  or 
twice  a  week.  It  is  responsible  for  ensuring  the  consistency  of  the  implementation  of 
administrative  reform  in  the  Commission  and  overseeing  the  co-ordination  of  policy 
implementation.  It  also  provides  a  forum  for  the  discussion  of  issues  of  horizontal 
interest.  All  Directors  General  and  Heads  of  Service  are  members  of  the  Group.  The 
Group  met  50  times  in  2003,  and  dealt  in  particular  with:  the  peer  review  of  the  draft 
reservations in the 2002 Annual Activity Reports (2 meetings); the readiness assessment 
of  Internal  Control  baseline  requirements  (2  meetings);  the  preparation  of  the  Annual 
Policy Strategy 2005; and the follow-up to the Annual Activity Reports’ and Synthesis’ 
action plans. 

The  Commission  decision  of  2 October 200215  fostered  the  creation  of  two  new  co-
ordinating  structures,  the  Interservice  Co-ordination  Group16  and  the  Group  of 
Resource  Directors17.The  Interservice  Co-ordination  Group  met  for  the  first  time  in 

14 
15 
16 

17 

Communication on Delivering Reform and Improving Interservice Co-ordination SEC(2002)1040 
Communication on Delivering Reform and Improving Interservice Co-ordination SEC(2002)1040 
« Interservice cooperation on policy implementation should be improved through an intermediate 
structure to review agenda planning, identify issues requiring particular attention and oversee in a 
co-ordinated  way  the  work  of  ad-hoc  groups  dealing  with  specific  issues »  (SEC(2002)1040/2, 
page 1) 
« For  the  delivery  of  administrative  reform,  resource  directors  should  be  brought  together  in  a 
more structured way to discuss the detailed issues that require attention and ensure that the needs 
of operational services are being taken into account » (SEC(2002)1040/2, page 1) 

53 

 
 
  
 
                                                 
January  2003  and  held  11  meetings  in  2003  (i.e.  one  meeting  per  month),  whereas  the 
Group of Resource Directors, which meets at least every two weeks, started its work in 
October  2002  and  met  31  times  up  to  end  December  2003.  Both  are  chaired  by  the 
Deputy Secretary-General in charge of co-ordination. 

The  Interservice  Co-ordination  Group  (ICG)  examines  the  Legislative  and  Work 
Programme  of  the  Commission,  monitors  it  quarterly,  oversees  every  month  the  three-
monthly rolling agenda of the Commission and identifies sensitive files, in particular to 
solve difference of views amongst Commission services. The first year of functioning of 
the  ICG  succeeded  in  improving  the  communication  between  services,  in  particular 
trough the regular discussion on sensitive files. Also, this Group is being used to discuss 
and  highlight  concerns  related  to  the  implementation  of  the  Commission’s  work 
programme,  based  on  monthly  updates  of  progress  reports  benchmarking  the  overall 
Commission  performance  and  that  of  individual  services.  Furthermore,  the  Group 
constituted  a  useful  discussion  forum  for  crosscutting  issues,  such  as  better  lawmaking 
and  simplification  of  the  Community  acquis,  as  well  as  impact  assessment.  A  more 
appropriate  representation  of  the  DGs  inside  the  Group  (e.g.  at  the  level  of  Deputy 
Director-General or Directors responsible for policy programming or general affairs, as 
initially foreseen), could bring in the future further effectiveness to the Group’s task of 
smoothing away controversial points in the initiatives to be submitted to the College. In 
parallel  with  the  creation  of  the  Interservice  Co-ordination  Group,  a  number  of  lower-
level  inter-service  groups  were  dismantled  or  fused  as  part  of  on  an  ongoing 
rationalisation in this area. 

The  Group  of  Resource  Directors  ensures  the  co-ordinated  implementation  of 
administrative Reform, provides feedback on the needs of the operational services, and is 
a forum for discussion and exchange of best practice between horizontal and operational 
services.  Major  reform-related  discussions  in  2003  concerned:  the  regular  follow-up  of 
the  implementation  of  the  new  Financial  Regulation;  the  assessment  of  the  first  Career 
Development  Review  (staff  appraisal  system)  exercise;  the  definition  of  common  rules 
for mobility of staff occupying sensitive posts, and the definition of recommendations for 
the improvement of internal communication in the Commission, including dissemination 
of  best  practice  across  services.  Thorough  discussions  took  place  within  this  Group  on 
enlargement-related administrative issues, such as integration of new staff from acceding 
countries,  impact  of  the  new  official  languages  on  the  management  of  Community 
programmes.  These 
issues  concerning  administrative  preparations  for 
enlargement are also dealt with in an ad-hoc Group of Directors General. 

important 

54 

 
 
  
 
THE COMMISSIONERS AND DEPARTMENTS 

5. 

PRINCIPLES  

ANNEX 4 

The  Treaty  establishing  the  European  Community  and  legislation  adopted 
pursuant  to  that  Treaty  ("secondary  legislation")  confer  on  the  Commission 
several duties, such as:  

–  acting as guardian of the Treaty and the provisions taken by the institutions 

under it; 

–  exercising the powers of initiative regarding acts of the Community legislator 

and non-legislative acts of the Council ; 

–  formulating recommendations or opinions on matters covered by the Treaty; 

–  taking decisions in its own right; 

–  exercising  the  powers  conferred  by  the  Council  or  the  legislator  in  order  to 

apply the rules of secondary legislation ; 

–  implementing the budget and in particular acting as authorising officer, a task 
it can delegate to officials, as a general rule the Directors-General or Heads 
of  Service,  subject  to  the  Staff  Regulations  and  to  other  servants,  the 
Financial Regulation, the Rules of Procedure and the rules laid down as part 
of the administrative and financial reform of the Commission. 

To  this  end,  the  Commission  acts  collectively  on  the  basis  of  the  political 
guidelines set by the President. The chain of responsibility runs from the level of 
the College to the level of the Commissioner, who is answerable to the College 
for  his/her  activities  and  those  of  his/her  departments.  The  Commissioner  lays 
down,  in  the  light  of  the  guidelines  and  work  programme  of  the  Commission 
and the principle of collegiality, the policy guidelines and priorities relating to 
his/her portfolio. He/she shall ensure that it is implemented by his departments, 
supervising  the  management  of  his/her  Director-General  or  Head  of  Service 
(hereinafter  the  Director-General)  and  giving  him/her,  where  necessary,  the 
guidelines  or  general  instructions  to  put  these  policies  and  priorities  into 
practice.  

The chain of responsibility continues down to department level in the person of 
the  Director-General,  who  is  answerable  to  the  Commissioner  and  the  College 
for  the  proper  implementation  of  the  guidelines  set  by  the  College  and  the 
Commissioner and, in particular, for the management of the Directorate-General 
or  Service  in  line  with  the  distribution  of  powers  as  defined  by  the  Staff 

55 

 
 
  
 
Regulations, the Financial Regulation, the Rules of Procedure and the rules laid 
down as part of the administrative and financial reform of the Commission18. 

In order to exercise his/her political responsibility and play his/her supervisory 
role, the Commissioner must receive the appropriate information from his own 
departments  and  the  central  departments,  including  information  with  regard  to 
the quality of internal control put in place in his/her departments. This exercise 
does not in any way release the Director-General from his/her duty of informing 
specifically  the  Commissioner  of  any  fact,  situation  or  matter  relating  to  the 
management,  in  particular,  financial  management,  which  could  have  a  serious 
impact on his/her responsibility or that of the College. 

The  working  arrangements  made  by  each  Commissioner  in  agreement  with 
his/her  departments  and  the  methods  for  circulating  information  between  them 
are  transmitted,  by  way  of  information  to  the  Head  of  the  President’s  cabinet 
and  to  the  Secretary-General.  Either  of  these  may  ask  for  further  information 
and/or clarification.  

Relations  between  Commissioners  (their  Cabinets)  and  departments  are 
based first and foremost on loyalty and trust. 

In addition to these general principles, the activities of Cabinets and departments 
are assigned with a view to complementing each other along the following lines. 

6. 

THE CABINET, AN ADJUNCT TO THE COMMISSIONER 

The  cabinet  is  an  adjunct  to  the  Commissioner.  All  information  duly 
communicated  to  the  cabinet  in  accordance  with  the  working  arrangements 
referred to above is information for the Commissioner.  

(1) 

The Cabinet shall first and foremost help to ensure that the principle of 
collective responsibility operates correctly by keeping the Commissioner 
informed  about  matters  outside  his  or  her  own  area  of  competence.  In 
this  connection  it  shall  play  an  active  role  in  the  preparation  of 
Commission  meetings  and  ask  questions and express points  of view  on 
behalf  of  the  Commissioner  on  the  items  tabled  for  a  decision.  It  shall 
also inform departments about the Commission's proceedings especially 
when they have a direct impact on the departments' own activities. 

(2)  While  avoiding  any  overlapping  with  the  work  of  the  departments,  the 
Cabinet  shall  assist  the  Commissioner  with  the  content  and  the  policy 
priorities  of  his  or  her  portfolio,  and,  in  particular,  ensure  that  the 

18Such as specified, in particular, in the following documents/communications : 
-Charter of tasks and responsibilities of authorising officers (SEC(2000)2203); 
-Internal control standards (SEC(2001)2037/4); 
-Communication  of  21/1/2003  –  “Clarification  of  the  responsibilities  of  the  key  actors  in  the  domain  of 

internal audit and internal control in the Commission – SEC(2003)59; 

-Communication  of  27  June  2001  –  The  annual  reports  and  declarations  required  of  Directors-General 
under the reform of the Commission (Action 82 of the White Paper) – SEC(2001)875/6; 

-Commission Decision of 4 April 2002 on raising concerns about serious wrongdoings – C(2002)845 

56 

 
 
  
 
                                                 
in  relation 

Commissioner  is  kept  abreast  of  the  information  transmitted  by 
to  matters  of  budgetary  and  financial 
departments 
management. It shall take part in the major stages of policy formulation 
by  consulting  the  departments  on  the  priorities  set.  The  Cabinet  shall 
ensure  that  priorities  and  programming  are  complied  with.  This 
monitoring function shall be performed on an across-the-board basis by 
the  member(s)  concerned  without  any  direct  reflection  of  the  structure 
and  organisation  chart  of  the  Directorate-General  in  question.  The 
the 
inform  departments  about  decisions 
Cabinet  shall 
Commissioner. It shall prepare the ground for political agreement by the 
College at the final decision-making stage. 

taken  by 

In  the  interests  of  efficiency  the  Chef  de  cabinet  and  the  Director-
General  shall  keep  each  other  fully  informed  about  contacts  with  the 
outside on matters falling within the portfolio. 

level  outside 

The  members  of  the  Cabinet  shall  represent  the  Commissioner  at 
political 
the 
Commissioner's  instructions.  Technical  matters  falling  within  the 
Commissioner's policy area should preferably be handled by departments 
in order to prevent any duplication of effort. 

in  accordance  with 

institution, 

the 

The  Cabinet  shall  act  solely  in  the  interests  of  the  institution  in 
performing its tasks. 

The  Cabinet  shall  comply  strictly  with  the  Commission's  rules  on 
security  as  contained  in  the  Annex  to  its  Rules  of  Procedure  (see 
Decision C(2001)3031 of 29/12/2001 – OJ L 317, 3/12/2001). 

(3) 

(4) 

(5) 

(6) 

7. 

THE DEPARTMENTS  

In accordance with the procedures described at point 4 below, departments:  

(7) 

(8) 

shall ensure implementation of the priorities adopted and the guidelines 
set out at political level. To that end, they shall contribute to or prepare 
the instruments provided for in the strategic planning and programming 
cycle19: at the level of the Commission, the decision on the annual policy 
strategy, the preliminary draft budget and the legislative programme and 
work programme; at their own level, the annual management plan, which 
will serve as a reference framework for drafting the activity report at the 
end of the cycle; 

shall help to prepare the policy guidelines the Commissioner has to set, 
by proposing strategy options, advising the Commissioner on individual 
political  decisions  and  providing  all 
the  necessary  background 
information.  The  departments  shall  also  provide  the  Commissioner  and 
his/her  cabinet,  in  accordance  with  arrangements  laid  down,  with  any 
information necessary for their work, such as draft speeches or briefs; 

19 SEC(2000)1294/4. 

57 

 
 
  
 
                                                 
(9) 

shall provide the Commissioner with regular and appropriate information 
on  budgetary  and  financial  matters  relating  to  areas  of  activity  under 
his/her  responsibility.  In  addition,  they  shall  report  at  any  time  on  any 
important event in departments, in the Member States or in international 
bodies that might have an impact on his/her position in the College or on 
the  sound  management  of  appropriations  or  which  could  hamper  the 
attainment of the objectives set;  

(10) 

shall coordinate with the Commissioner and his/her cabinet contacts with 
the outside world. 

8. 

BASIC RULES  

In  order  to  ensure  that  the  institution  operates  as  efficiently  as  possible,  these 
principles shall be applied in accordance with the following rules.  

8.1. 

Organisation of the work 

In order to ensure effective collaboration and optimum management of the flow 
of  information  between  Cabinets  and  departments,  the  working  arrangements 
must be laid down as soon as the Commissioner takes office. 

The Director-General shall organise and coordinate the work of departments in 
accordance with the guidelines laid down by the Commissioner. 

8.1.1.  Mission statement 

The Commissioner shall determine the general policy line for his or her area of 
responsibility,  including  the  "negative  priorities",  within  the  Commission's 
overall policy framework. In close consultation with the Director-General,  this 
policy line shall then be set out in a mission statement. This mission statement 
shall be drawn up in the first month of the Commission's term and shall be sent 
to  the  President  for  information;  it  shall  be  adjusted  regularly  as  the  situation 
changes. 

The  Director-General  shall  assume  full  management  responsibilities  on  this 
basis.  The  Director-General  may  ask 
for  written 
confirmation. 

the  Commissioner 

8.1.2.  Working arrangements and information channels 

Working arrangements and information channels shall be laid down in the first 
month of the Commission's term of office by the Director-General and the Chef 
de cabinet, who will ensure that they are endorsed by the Commissioner20. 

A copy of these arrangements shall be sent to the President's Chef de cabinet for 
information. 

20 Concerning Interinstitutional offices, these rules should be established without prejudice to those set out 

in the basic act establishing the office. 

58 

 
 
  
 
                                                 
These  rules  must  comply  with  the  principles  of  loyalty,  accountability, 
decentralisation,  effectiveness,  information  and  non-interference  and  cover  the 
following areas: 

–  Organisation  of  frequent  and  regular  meetings  between  the  Directorate-
General and the Commissioner. At the very least a strategic meeting should 
be  held  once  a  month  and  a  meeting  on  audits  and  internal  control  twice  a 
year. 

–  Channels for requests from the Commissioner and the departments' replies: 

–  Contact  points  must  be  established  for  political  issues  and  for  routine 
management matters, including matters relating to internal control. Decisions 
will  also  have  to  be  taken  at  the  start  of  the  term  of  office  on  the 
arrangements  for  setting  deadlines  and  for  transmitting  replies.  In  the 
interests  of  simplification  and  assumption  of  responsibility,  it  is  suggested 
that routine replies, i.e. those involving the Directorate-General's known and 
established position, should be sent direct by the Unit Head (or Director) to 
the  member  of  the  Cabinet  handling  the  matter  with  a  courtesy  copy  to  the 
central contact point.  Replies  involving the determination of a new position 
or  altering  a  position  previously  held  and  those  on  matters  considered 
sensitive  shall  be  sent  by  the  Director-General  to  the  Commissioner  (or, 
where appropriate, to the Chef de cabinet). 

–  Arrangements  will  also  be  made  for  sharing  between  the  Commissioner's 

Office and departments responsibility for: 

–  handling the Commissioner’s mail; 

–  producing files or briefs and preparing speeches; 

–  dealing with requests for files or speeches from other Commissioners; 

–  representing the Commissioner and making travel arrangements; 

–  monitoring  the  decisions  taken  at  the  regular  meetings  described  above,  in 

particular, decisions relating to audits. 

To safeguard the organisational structure and the information and coordination 
channels set up, requests sent by a Cabinet to a department for  which it is not 
responsible  should  in  principle  go  via  the  Office  of  the  Commissioner 
responsible. Similarly, departments will, as a rule, refrain from contacting other 
Cabinets  direct;  where  they  do  so  they  will  inform  their  own  Cabinet  of  these 
contacts. 

8.1.3. 

Specific  cases  of  launching  new  initiatives  and  handling  sensitive  information 
for which the Commissioner and/or the College could be held responsible 

Before launching any new initiative, other than on purely routine management 
matters, 
the 
Commissioner,  especially  if  initiating  inter-departmental  consultations.  On 

the  Director-General  shall  first  secure 

the  agreement  of 

59 

 
 
  
 
matters  of  major  importance  joint  meetings  of  Directors-General  and  Chefs  de 
cabinet may/must be held. 

As  stated  in  point  3  above,  departments  are  required  to  inform  the 
Commissioner  of  any  sensitive  information  which  could  call  into  question 
his/her  responsibility  or  that  of  the  College.  The  information  is  passed  on 
through a formal referral procedure characterised by the following:  

–  written  information  giving  rise  to  a  formal  and  rapid  reaction  from  the 
Commissioner  in  the  form  he/she  considers  most  appropriate  (personal 
interview, request for further information ….); 

–  on  the  basis  of  further  discussions  or  information,  the  drawing  up  of  a 
documented  action  plan,  the  implementation  of  which  is  the  subject  of 
specific  monitoring  provisions  agreed  between  departments  and 
the 
Commissioner. 

On  taking  office,  the  Commissioner  must  be  informed  of  serious  situations 
which  had  arisen  previously  and  which  have  not  yet  been  fully  resolved. 
Information on any new situation of that kind that arises during his/her term of 
office must be provided immediately. 

8.2.  Management of resources  

8.2.1.  Management of financial resources 

On taking up office, the Commissioner shall be informed by the departments of 
the  scope,  the  respective  responsibilities,  the  problems  and  risks  linked  to 
financial  management  in  the  Directorate-General  or  Service.  The  information 
shall  include  a  detailed  description  of  the  financial  circuits  in  place  in  the 
Directorate-General  or  Service,  including  internal  control  arrangements.  The 
Commissioner shall also be informed of the most recent reports of the Court of 
Auditors,  Parliamentary  debates  relating  to  the  discharge,  previous  Annual 
Activity  Reports,  any  comments  by  the  Internal  Audit  Service  (IAS)  or  the 
Central Financial Service (CFS), OLAF investigations closed or still ongoing21, 
internal audit reports  and progress  made in the implementation of measures  or 
action  plans  adopted  on  any  of  these  matters.  The  Commissioner  may,  where 
necessary, ask the Commission to have the IAS carry out an immediate audit on 
an aspect of the financial management of the Directorate-General.  

During  the  term  of  office,  departments  shall  send  to  the  Commissioner  for 
approval the main documents relating to the strategic programming cycle22. 

Moreover, the Commissioner shall be regularly and properly informed of:  

21 Except where OLAF has specifically prohibited this. 
22 See point 3.1 above. This concerns, in particular, contributions to the APS decision, to the preliminary 
draft budget, to the legislative programme and work programme, and documents linked to those 
contributions  such  as  budgetary  planning  (commitments/payments)  and  the  (pre)legislative 
proposals submitted to the Commission for approval. 

60 

 
 
  
 
                                                 
–  any proposal to make changes in the financial circuits and control systems; in 
the  event  of  a  disagreement  those  changes  are  set  out  in  a  proposal  to  be 
submitted to the Commission for a decision;  

–  all  audit  work  (and  a  related  risk  assessment)  undertaken  by  the  various 
control bodies (and, in particular, the internal audit capability (IAC), the IAS, 
the  European  Court  of  Auditors  the  Directorate-General  or  the  Service  by 
way  of  ex  post  controls  and  OLAF).  There  shall  be  a  meeting  on  this 
information  at  least  every  six  months  between  the  Commissioner  and  the 
Director-General, who will give an account of these meetings in the activity 
report. 

Without  prejudice  to  the  procedure  provided  for  in  point  4.1.3  above, 
departments shall also inform the Commissioner of comments relating to his/her 
area  made  by  Members  of  the  European  Parliament,  in  particular  in  written  or 
oral questions, and any allegations of irregularity or fraud brought to the notice 
of the Director-General. 

The  aim  of  this  dialogue  is  to  inform  the  Commissioner  before  the  drafting  of 
the  activity  report,  of  any  qualifications  (comments  and/or  reservations)  which 
could  be  added  to  the  declarations.  The  action  plan  proposed  by  the  Director-
General  shall  be  the  subject  of  a  written  document  and  a  specific  follow-up 
procedure. 

With regard to the budget for administrative appropriations, there shall be strict 
demarcation between the Directorate-General and the Commissioner's Office in 
the  management  of  its  appropriations,  for  items  such  as  mission  expenses, 
entertainment expenses, etc. 

8.2.2.  Management of human resources 

The  guiding  principle  shall  be  to  apply  fully  the  general  rules  adopted  by  the 
Commission as part of its administrative reform. 

For  non-management  staff  appointments  shall  be  the  responsibility  of  the 
Director-General,  acting  in  conjunction  with  the  Directorate-General  for 
Personnel and Administration as regards the official instruments. 

For  appointments  of  Heads  of  Unit  and  Advisers,  the  Director-General  shall 
conduct  the  selection  procedure  and  choose  the  most  suitable  candidate  in 
accordance  with  the  specific  procedures  adopted  by  the  Commission23.  He/she 
shall inform the Commissioner of his/her choice prior to formally adopting the 
decision in accordance with the AIPN rules. 

Appointments to A1 and A2 posts shall be made in accordance with the specific 
procedures adopted by the Commission24. 

23 SEC(2000)2305/5 
24 SEC(1999)1485 & SEC(2000)2305/5 

61 

 
 
  
 
                                                 
Vacancy  notices  for  management  posts  (A1,  A2,  Heads  of  Unit)  must  be 
published within no more than three months from when the post falls vacant. 

8.3. 

Referral to the President 

Should the Commissioner and the Director-General disagree on the application 
of  this  code  or  differ  in  their  interpretation  of  its  contents,  they  may  refer  the 
matter to the President. 

62 

 
 
  
 
ANNEX 5 

Summary of internal control provisions as developed since March 2000, 
including measures taken in the wake of the Eurostat crisis 

The  March  2000  White  Paper  set  out  an  internal  control  architecture  that  provides  a 
continuous  assessment  of  internal  control  in  the  Commission  in  order  to  take  remedial 
action  when  necessary.  The  prime  vehicle  for  this  process  is  the  Annual  Synthesis 
Report, which summarises the contents of Annual Activity Reports of Directors General 
and  Heads  of  Service.  In  addition,  changes  to  the  internal  control  framework  are  made 
based on recommendations by the Court of Auditors and the European Parliament. As a 
result, while the general internal control framework set out in March 2000 has remained 
stable, the roles of its principal actors and, above all, the information flow between them 
has  evolved  over  time.  It  is  therefore  necessary  and  useful  to  consolidate  the  main 
decisions  that  constitute  amendments  to  the  White  Paper  in  one  place,  including  the 
measures proposed in the wake of the Eurostat crisis in the present Progress Report. 

This  annex  serves  this  specific  purpose.It  is  based  on  a  recommendation  made  by  the 
Court of Auditors in its Annual Report for Financial Year 2002, which is also reflected in 
requests  made  by  Members  of  Parliament  in  the  course  of  the  discharge  procedure.25 
Significant  changes  to  the  original  functions,  mandates  and  procedures  set  out  in  the 
March  2000  White  Paper  are  indicated  in  italics.  The  first  two  sections  provide  an 
overview  of  actors  and  procedures  related  to  financial  management  and  internal  audit, 
respectively. Section 3 summarises changes to the framework of budgetary execution and 
initiatives  to  protect  the  Community’s  financial  interest.  The  relevant  actions  of  the 
March 2000 White Paper Action Plan are referred to in the margin. 

9. 

FINANCIAL MANAGEMENT 

9.1. 

Authorising  Officer  and  Authorising  Officers  by  Delegation  and 
Subdelegation 

9.1.1.  Definition and codification of the function 

Action 64 

Action 65 

Action 86 

Action 88 

The  new  Financial  Regulation  reflects  the  principles  set  out  in  the  White  Paper.  While 
the  Institution  (i.e.  the  College)  has  the  function  of  Authorising  Officer,  it  delegates 
financial management and control to Authorising Officers by Delegation (i.e., Directors 
General  and  Heads  of  Service).  Delegated  Authorising  Officers  are  responsible  for 
financial  management  in  their  services,  including  functions  that  had  previously  been 
fulfilled at central level, such as, for instance, the centralised ex-ante visa performed by 
the  Financial  Controller,  which  was  abolished  in  the  context  of  Reform.  Delegated 
Authorising  Officers  can  subdelegate  certain  functions  to  Authorising  Officers  by 

25 

The Court of Auditors specifically mentions that “new actions were introduced when the reform 
of the internal control system was put into effect…Under these circumstances it would be much 
easier to study the progress of the reform if all the action plans and updates of the White Paper 
actions could be consolidated within a single document…”Annual Report concerning the financial 
year 2002. Section 1.108. This reasoning is confirmed in the analysis of the Court’s comments in 
the  Working  Document  about  the  reform  of  the  Commission  by  G.Dell’Alba,  Member  of  the 
European Parliament (PE 338.173). 

63 

 
 
  
 
                                                 
Action 63 

Subdelegation.  The  rights  and  obligations  of  Delegated  and  Subdelegated  Authorising 
Officers were laid down in accordance with the White Paper in two different charters.26 

While the role of Delegated Authorising Officers has not changed – they remain at the 
centre  of  the  internal  control  system  and  take  full  responsibility  for  internal  control 
systems under their responsibility – the Commission has decided to make their reporting 
requirements more specific than originally foreseen in the Charter of Authorising Officer 
by Delegations. It decided in July 2003 that Authorising Officers by Delegation should 
report at least twice a year to their Commissioner on work undertaken by their internal 
audit  capabilities  and  appropriate  issues  arising  from  the  work  of  the  Internal  Audit 
Service,  the  Court  of  Auditors,  the  Directorate  General  itself  and  OLAF.27The  revised 
Code  of  Conduct  for  Relations  between  Commissioners  and  their  Services,  which  is 
attached to the present Progress Report, emphasises the political responsibility exercised 
by  the  Commissioner  by  specifying  the  minimum  frequency  and  precise  nature  of 
information a Commissioner must receive from his/her services.28 

9.1.2.  Annual Activity Reports and Declarations 

Action 82 

Delegated  Authorising  Officers  are  required  to  issue  an  Annual  Activity  Report  and 
Declaration, in which they report about the achievement of objectives specified in their 
their 
Annual  Management  Plan.  In  particular, 
Commissioner  and  the  College  about  financial  management  in  their  services  and 
highlight  material  deficiencies,  if  any,  of  the  internal  control  system  under  their 
responsibility.  Subdelegated  Authorising  Officers  issue  regular  reports,  which  are  also 
used in the preparation of the annual activity reports. 

they  provide  an  assurance 

to 

Starting with Action 10 of the Synthesis Report 200229, the Commission has reviewed and 
refined  the  methodology  for  establishing  Annual  Activity  Reports  and  Declarations.  As 
recommended  by  the  Court  of  Auditors,  the  refinements  are  undertaken  with  a  view  to 
making  reservations  clearer  and  better  understood  and  to  ensuring  full  comparability 
across Commission services. In addition, Resource Directors will be asked to comment 
on those parts of the Annual Activity Reports and Declarations which concern internal 
control.30 

Action 83 

In order to ensure adequate controls, Delegated Authorising Officers must make sure to 
earmark human and administrative resources needed for proper monitoring and control of 
programmes in the framework of activity-based management. 

In  reaction  to  the  Annual  Activity  Reports  for  financial  years  2001  and  2002,  the 
Commission asked its services to provide priority in resource allocation for units that are 
specifically  dealing  with  internal  control  and  audit  matters.  In  addition,  services  were 

26 Supporting the Reform of Financial Management. SEC(2000)2203/5 and SEC(2001)454 
27 2002 Synthesis of Annual Activity Reports and Declarations of Directors General and Heads of Service. 

COM(2003)391 final 

28 Reform Progress Report on the year 2003 
29 2001 Synthesis of Annual Activity Reports and Declarations of Directors General and Heads of Service. 

COM(2002)426 final 

30 Reform Progress Report on the year 2003 

64 

 
 
  
 
                                                 
asked to identify training and recruitment needs in order to allow the design of training 
and recruitment programmes.31 

Action  80 
and 81 

As concerns Subdelegated Authorising Officers, the Commission recognised the specific 
role  of  financial  units  and  control  functions,  when  it  decided  that  each  Directorate 
General and Service should have a coordinator (contact officer) – who is the Resource 
Director or equivalent - for the coordination of internal control, who would provide all 
relevant information to the Central Financial Service32 

9.1.3.  Regular self assessments 

Action 84 

In the autumn of 2000, Directorates General began the process of self assessing their internal 
control  systems,  using  the  draft  Internal  Control  Standards  as  a  basis,  with  a  view  to 
establishing the systems which would need to be in place on removal of the centralised ex-
ante visa. 

The  self  assessment  methodology  has  now  become  a  regular  part  of  the  services’  own 
evaluation  and  reporting  process.In  the  framework  of  the  2002  Synthesis  report,  services 
have  also  used  this  approach  in  order  to  assess  the  implementation  of  the  internal  control 
baseline requirements by the end of 2003.  

9.2. 

The Central Financial Service 

Action 72 

Action 78 

Action 72 
Actions 
 73 & 76 

Action 77 

Action 75 

Action 91 

The  creation  of  the  Central  Financial  Service  (CFS)  followed  the  Commission  decision  to 
create  a  specific  service  in  support  of  financial  management  in  Directorates-  General  and 
services. The CFS defines the regulatory framework for using Community finances and the 
Standards  for  Internal  Control.  It  supports  Commission  services  by  laying  down  standard 
model  contracts  and  by  providing  advice  on  internal  control  and  financial  management, 
including contract management and procurement procedures. For this purpose, the CFS uses 
specific user networks, such as the RUF ("Réseau des Unités Financières") and the Internal 
Control  Coordination  Network.  The  CFS  also  develops  and  manages  common  financial 
management  information  systems,  provides  operational  manuals  of  financial  management 
and organises training courses on financial and internal control matters. 

While the role of the CFS today does not substantially differ from that set out in the White 
Paper,  the  Commission  has  asked  the  CFS  to  provide  a  yearly  overview  of  the  Internal 
Control  System  to  the  College  as  well  as  a  mid-term  review.For  this  purpose,  the 
Commission  has  also  specified  that  Resource  Directors  in  Directorates  General  should 
supply the CFS with the basic information on which its overviews are based.33.The aim is to 
produce a summary of the state of play on internal control and to identify best practices and 
potential weaknesses at Commission level. 

312001 Synthesis of Annual Activity Reports and Declarations of Directors General and Heads of Service. 
COM(2002)426  final. 2002 Synthesis  of  Annual  Activity  Reports  and Declarations  of  Directors 
General and Heads of Service. COM(2003)391 final 

32  The  basic  functions  of  finance  units  are  set  out  in:  Supporting  the  Reform  of  Financial  Management. 
SEC(2000)2203. For the role of Resource Directors in liaising with the Central Financial Service 
see:  Clarification  of  the  roles  of  key  actors  in  internal  audit  and  internal  control  in  the 
Commission (SEC(2003)59 of 21.1.2003. 

33  Clarification  of  the  roles  of  key  actors  in  internal  audit  and  internal  control  in  the  Commission 

(SEC(2003) 59 of 21.1.2003.Reform Progress Report on the year 2003. 

65 

 
 
  
 
                                                 
Action 78
Action 78 

Action 78
Action 78 

For this purpose, DG Budget has made specific working arrangements between the Central 
Financial  Service  and  Directorates  General.  A  'position  statement'  for  each  DG  will  be 
produced under the responsibility of the CFS, but with the cooperation of and in conjunction 
with the Directorates General and based on agreed sources of information, including audit 
reports, work done by Directorates General to support their Annual Activity Reports and the 
information sent at least twice yearly to Commissioners on audit and control issues. 

9.2.1. 

Setting Internal Control Standards 

In  December  2000,  the  Commission  adopted  a  proposal  for  24  internal  control  standards, 
which had been developed by DG Budget’s Central Financial Service.34This was a key step 
forward  in  that  it  constituted  for  the  first  time  a  framework  of  internal  control  based  on 
internationally  accepted  norms  and  standards  and  provided  a  wide  ranging  definition  of 
internal control which embraced both financial and non-financial aspects. The standards are 
based  on  the  following  control  components:  Control  Environment,  Performance  and  Risk 
Management, Information and Communication, Control Activities and Audit and Evaluation. 
They cover the broad spectrum of the activities undertaken by the Commission at all levels. 

By  December  2001,  services  had  some  experience  of  trying  to  implement  the  Control 
Standards. Attention was primarily focused on financial matters, but a number of horizontal 
initiatives,  for  example  on  human  resource  and  Activity  Based  Management  issues  were 
being made more concrete. Also, it was soon realised that some of the initial expectations on 
timing  were  unrealistic.  The  aim  therefore  was  to  define  common  baseline  requirements 
through all services and which would reflect the complementary initiatives already underway 
and whose meaning would be clearer to services. 

As  a  result,  this  question  was  addressed  in  the  2001  and  2002  Synthesis  Reports.  Services 
self-assessed the expected level of implementation of internal control baseline requirements 
by  the  end  of  2003.35  The  results  indicate  that,  with  a  few  exceptions,  most  Directorates 
General  expected  to  have  reached  a  high  degree  of  compliance  by  the  year  end.  In  mid-
February  2004,  Directorates  General  will  be  expected  to  confirm  that  their  expectations 
have been realised in practice. This update is likely to form the basis of an annex to the 2003 
Annual Activity Reports. 

9.3. 

The Accounting Officer 

Action 74
Action 74 

While  Accounting  Reform  was  not  included  in  the  March  2000  White  Paper,  it  was 
proposed as part of the recasting of the Financial Regulation in 2001. It is clear that the 
fundamental overhaul of the  accounting  system is essential for the implementation of a 
number  of  actions  mentioned  in  the  White  Paper.  In  particular,  financial  management 
information system, such as the Central Invoice Register and the Contractors Database, 
will be integrated in the new accounting system. 

Deadlines  for  the  presentation  of  an  Accounting  Reform  Project  were  therefore  set  in 
Action  16  of  the  2001  Synthesis  report.  As  a  result,  the  Commission  adopted  its 
Communication  of  the  modernisation  of  the  accounting  system  in  December  2002.36At 
the  same  time,  it  upgraded  the  function  of  the  Accounting  Officer  to  A1  level.  The 

34 Supporting the Reform of Financial Management. SEC(2000)2203 
35 2002 Synthesis of Annual Activity Reports and Declarations of Directors General and Heads of Service. 

COM(2003)391 final 

36 COM(2002)755 

66 

 
 
  
 
                                                 
objective  of  the  project  is  to  have  an  accrual-based  accounting  system  in  place  by  the 
beginning of 2005, which is compliant with the formal requirements of the new Financial 
Regulation. 

10. 

INTERNAL AUDIT 

10.1.  The Internal Audit Service (IAS) 

Action 68

Action 70 

Action 69 
Action 69

Action 87
Action 87 

The  IAS  became  operational  in  September  2000.It  is  not  itself  responsible  for  the 
implementation and management of controls, which is why it was established as a separate 
structure  independent  from  Financial  Control  as  soon  as  an  amendment  to  the  Financial 
Regulation made this possible. Under Article 86 of the revised Financial Regulation the IAS 
is responsible for assessing the suitability and effectiveness of internal management systems 
and  of  the  internal  control  and  audit  systems.  Its  mission  is  to  assist  management  in 
controlling  risks,  monitoring  compliance,  to  provide  an  opinion  on  the  quality  of 
management and control systems and to improve efficiency and effectiveness of operations. 
The service reports to the Vice-President form Reform and works on the basis of a risk based 
Annual Plan and a three year rolling Forward Audit Plan. Its rights and obligations are laid 
down in a specific charter.37 Its first task, which should conclude this year, is a series of in-
depth audits of all Commission services. 

Since  its  creation,  the  Commission  has  not  changed  the  function  of  the  Internal  Audit 
Service, but has enlarged its mandate, specified its reporting requirements and strengthened 
its  relations with  Internal  Audit  Capabilities.  The scope  of  IAS  work has  been  enlarged  by 
the new Financial Regulation’s provision that the Internal Auditor of the Commission is also 
the  Internal  Auditor  of  Community  Agencies.  The  IAS  will  issue  and  annual  report  and  an 
interim  report  summarising  the  result  of  completed  audits,  recommendations  issued  and 
follow-up work that was undertaken. The IAS will also receive IAC reports. In addition, the 
IAS will chair meetings of Auditnet, which brings together all Internal Audit Capabilities of 
the  Commission.  The  IAS  will  therefore  pursue  the  objectives  of  coordination  and 
professional  guidance  with  existing  resources  (i.e.  through  correspondents  work  and 
resources available for coordination work) while  its major task remains that set out in the 
Financial  Regulation  and  to  provide  an  audit  opinion  for  internal  controls  in  the 
Commission as  a  whole. Besides  increasing  the  number of  staff  in  the  IAS  to  cope  with  its 
mandate  to  audit  Community  Agencies,  the  Commission  has  also  recently  adopted  a 
strengthening  of  the  service  through  a  change  in  its  organigramme,  which  provides  for  an 
additional Director-level post.38 

10.2. 

Internal Audit Capabilities 

Action 81
Action 81 

Internal Audit Capabilities (IACs) were created in services to provide assurance to Directors 
General  on  the  functioning  of  internal  control.  Their  specific  function  and  reporting 
requirements as well as the establishment of Auditnet, which brings together the IAS and all 
IACs, were specified in October 2000.39  

37Charter of the Internal Audit Service of the European Commission. SEC(2000) 1801//2. 
38Clarification  of  the  roles  of  key  actors  in  internal  audit  and  internal  control  in  the  Commission 

(SEC(2003) 59 of 21.1.2003. Reform Progress Report on the year 2003.  

39Conditions  for  the  Creation  of  an  Internal  Audit  Capability  in  each  Commission  Service.  SEC  (2000) 

1803. 

67 

 
 
  
 
                                                 
 
 
The  function  of  IACs  has  not  changed  since  then  but  was  reconfirmed  in  Action  13  of  the 
Synthesis Report on the 2001 AARs. This report confirmed that the IACs are not responsible 
for installing or managing control systems and do not form part of the management control 
function. They report to the Director General and should express an opinion on the state of 
internal control as a contribution to the preparation of the Annual Activity Report. They are 
expected  to  co-operate  constructively  with  the  IAS  in  coordinating  their  respective  work 
plans.40  As  laid  down  in  the  present  Progress  Report,  IACs  will  in  future  send  all  their 
completed audit reports to the IAS, highlighting critical findings. 

10.3.  Audit Progress Committee  

Action 71
Action 71 

The Audit Progress Committee (APC) was established to ensure the independence of the IAS 
and  to  monitor  the  control  processes  of  the  Commission  through  the  results  of  audits 
undertaken by the IAS and Court of Auditors, the implementation of audit recommendations 
and the quality of audit work undertaken. Its main task so far has been to ensure that services 
follow up audit recommendations made by the IAS. Its rights and obligations are laid down 
in a specific charter.41 

While the function of the Committee has not changed, it took measures to address comments 
made by the Court of Auditors in its Annual Report for the year 2001. In order to manage 
any  appearance  of  potential  conflicts  of  interest,  the  Committee  decided  that  its  Members 
would not chair agenda points that related to services under their political responsibility. In 
addition,  the  Commission  decided  that  the  Committee’s  Secretariat  would  move  from  DG 
Budget to the Secretariat General. The Commission also accepted the recommendation of the 
Committee to recruit a second external member, who must be a specialist in internal audit. 

11. 

THE FRAMEWORK FOR BUDGETARY EXECUTION AND THE PROTECTION OF THE 
COMMUNITY’S FINANCIAL INTERESTS 

11.1.  Legislative basis for expenditure 

The new Financial Regulation provides the general obligation for the Commission to adopt a 
basic act before the appropriations entered in the budget for any Community action may be 
used as already convened in the Interinstitutional Agreement. 

The  exceptions  from  this  principle  are  very  limited:  pilot  schemes,  preparatory  actions, 
institutional  prerogatives,  administrative  autonomy.  This  has  led  Commission  to  propose 
basic acts to cover for a transition period of two years grants to specific beneficiaries so 
far only earmarked by the Budgetary Authority, notably on the basis of the former A-30 
chapter. 

According to Article 75 of the Financial Regulation, the financing decision must be adopted 
by  the  Institution  or  authorities  to  which  powers  have  been  delegated  by  the  Institution. 
Article 90 of the Implementing Rules of the Financial Regulation provides that the financing 
decision shall determine the essential elements of an action involving expenditure from the 
budget. It is on the basis of this financing decision that the delegated authorising officer takes 
the acts of budgetary implementation. 

40  Clarification  of  the  roles  of  key  actors  in  internal  audit  and  internal  control  in  the  Commission 

(SEC(2003) 59 of 21.1.2003. Reform Progress Report on the year 2003. 

41 The Audit Progress Committee of the European Commission. SEC(2000)1808/3 

68 

 
 
  
 
                                                 
11.2. 

Setting a legal framework of the attribution and the management of grants 
and procurement procedures  

The new Financial Regulation and its implementing rules provide a clear legal framework for 
procurement and introduce rules for Community grants. The fundamental principles, such as 
transparency and equal treatment during the award procedure concerning grants and respect 
of  the  principle  of  sound  financial  management  in  the  field  of  the  execution  of  grants 
(principles of co-financing, interdiction of cumulative and retrospective awards). 

Action 76
Action 76 

Action 75
Action 75 

The Commission has adopted a standard grant agreement for financing an action carried out 
by a beneficiary third party (single-beneficiary agreement) and a standard grant agreement to 
finance the operation of a beneficiary third-party body in order to help services to apply the 
relevant  provisions  and  to  harmonize  the  terms  of  agreements  to  be  established  between 
Commission  and  beneficiaries.  A  practical  guide  for  grants  and  a  standard  framework 
partnership grant agreement are being prepared. 

In November 2003 the Central Financial Service has provided a new Vade-mecum on Public 
Procurement to the services, which is in line with the new legal requirements. Commission 
services  are  provided  with  standard  service  and  standard  framework  supply  contract.  A 
standard  service  framework  contract,  a  supply  contract  and  a  low-value  supply/service 
contract are under preparation. 

11.3.  Better protection of the Financial Interests of the Communities 

The above mentioned actions related to grants and procurement made it possible to reinforce 
the  provisions  related  notably  to  the  requirement  of  financial  guarantees,  to  suspension  of 
contracts and agreements in the event of errors or irregularities and their termination in order 
to protect the financial interests of the Communities. 

The  new  Financial  Regulation  reinforces  the  protection  of  the  financial  interests  of  the 
Communities before a contractual relation exists between the Communities and a third party, 
as it provides the obligation (and not a possibility as provided for by the public procurement 
directives) for the contracting authority: 

•  To exclude all tenderers, candidates or applicants from participation in a procurement 
or award procedure if one of they are in a situation referred to by article 93 of the FR. 
These situations have been taken from the Public Procurement directives, although the 
FR has added the cases of convictions for fraud, corruption, involvement in a criminal 
organisations  or  any  other  illegal  activity  detrimental  to  the  Communities'  financial 
interests  and  serious  breach  of  contract  for  failure  to  comply  with  their  contractual 
obligations.  This  provision  has  already  been  applied  in  the  framework  of  the 
EUROSTAT  file,  in  which  Commission  had  decided  to  cancel  contractual  relations 
with entities which, at the same time, have been candidates in procurement or award 
procedures. 

•  To  exclude  all  third  parties  that  are  subject  to  a  conflict  of  interest  or  are  guilty  of 
misrepresentation in supplying required information for participation in a given award 
procedure (Article 94 of the Financial Regulation) from the award of the contract or 
grant concerned. 

The  Financial  Regulation  offers  the  possibility  for  the  contracting  authority  to  impose 
administrative  (exclusion  from  all  contracts  and  grants  financed  by  the  Community  budget 

69 

 
 
  
 
Action 92 
Action 92

Action 94
Action 94 

Action 93
Action 93 

Action 95
Action 95 

Action 79 

Action 85 
Action 85

Action 96 
Action 96

for  a  period  defined  in  article  133  of  the  Implementing  Rules  of  the  FR)  and  financial 
penalties. 

Concerning other measures set out in the White Paper, the Administrative Guide adopted in 
October 2003 incorporates guidelines for sound project management prepared by OLAF. A 
Communication concerning fraud proofing of legislation and contract management was 
adopted on 7 November 2001.42 As regards the follow-up of the communication, a fraud 
proofing procedure on bilateral basis with OLAF and the DG in charge of the concerned 
legislative  project  has  been  set  up  providing  for  an  examination  by  OLAF  even  before 
the  Interservice  Consultation.  In  addition  to  that,  a  specific  working-group,  chaired  by 
OLAF has been created. 

For  better  coordination  of  interaction  between  OLAF  and  other  services,  the  Commission 
adopted  on  23  July  2003  a  provisional  Memorandum  of  Understanding.43  However,  the 
Commission  is  now  proposing  specific  amendments  to  the  OLAF  Regulation,  which  will 
supersede this MoU. 

The  Commission  has  taken  into  account  new  exclusion  cases  in  its  Early  Warning  System 
and has invited the other institutions, via their Accounting Officers, to name their points of 
contact which will be empowered to receive information on exclusions cases in accordance 
with Article 95 of the Financial Regulation. This information flow will be subject to specific 
security provisions. 

In its internal decision-making mechanisms, the Commission has ensured that the principle 
of segregation of duties is fully implemented via a number of financial circuit models, from 
which  Delegated  Authorising  Officers  could  choose.44  In  Action  10  of  the  2001  Synthesis 
Report  the  Commission  asked  its  services  to  assess  at  the  end  of  2002  their  readiness  for 
complying with the new Financial Regulation by beginning of 2003, including the revision of 
their financial circuits and control environment.45 

11.4.  Amplification of the recovery procedure for funds wrongly paid 

The  new  Financial  Regulation  and  its  implementing  rules  define  the  role  of  the 
authorising  officer  when  establishing  and  recovering  the  receivable  amounts,  and 
empower  the  accounting  officer  to  recover  amounts  by  offsetting  against  claims.  The 
Commission  has  updated  its  internal  procedure  provisions  for  the  recovery  of 
entitlements  arising  from direct management and the  recovery of fines,  lump sums and 
penalty  payments  under  the  Treaties  of  17  December  2002  (C-2002-5048/4).  The 
Commission  has  also  updated  the  Guidelines  on  the  application  of  the  principle  of 
proportionality  and  the  waiving  of  recovery  of  an  established  amount  receivable  in 
accordance with the obligation of the institutions in accordance with Article 87 (2) of the 
implementing rules of the Financial Regulation. 

Internally, the Commission asked Delegated Authorising Officers to address the recovery 
of amounts due on direct expenditure in their annual management plans and charged the 

42 SEC(2001) 2029 final. 
43 SEC(2003) 871final. 
44 Supporting the Reform of Financial Management. SEC(2000)2203. 
45 2001 Synthesis of Annual Activity Reports and Declarations of Directors General and Heads of Service. 

COM(2002)426 final. 

70 

 
 
  
 
                                                 
Directorate General for Budget with the leadership of a monitoring process on clearance 
of the backlog of recoveries.46 

11.5.  Deontology and reinforcement of the liability of financial actors 

Beside the provisions mentioned above, the new Financial Regulation defines the notion 
of conflict of interests (Article 52), which covers a wide range of situations and provides 
a  clear  procedure  to  be  followed.  This  framework  is  better  adapted  to  assure  the 
impartiality of officials and agents and as a result of the institutions themselves. 

Financial liability of all officials is set out in Article 22 of the Staff Regulations, to which 
Article 66 FR refers. The Commission has adopted on 23 July 2003 a working document 
on the application of Article 22 which sets out the conditions for its application as well as 
the procedure to be followed. The concertation process with the Trade Unions and Staff 
Associations (OSP) has started in November 2003 and is still ongoing. 

By decision of 9 July 2003, the Commission has set up the Financial Irregularities Panel 
foreseen in Article 66 (4) of the Financial Regulation, which functions independently and 
is  charged  to  determine  whether  a  financial  irregularity  has  occurred  and  what  the 
consequences should be. Having secured an external President for the FIP, the Panel will 
commence its work early in 2004. 

Action 67 
Action 67

Action 66 

46 2002 Synthesis of Annual Activity Reports and Declarations of Directors General and Heads of Service. 

COM(2003)391 final. 

71 

 
 
  
 
                                                 
 
OBJECTIVE 

PURPOSE 

INDICATOR 

2002 

2003 

REFORM PROGRESS INDICATORS 

ANNEX 6 

Creating 
a 
culture based on 
service 

Improving 
setting 
priority 
and  efficient  use 
of resources 

The  overhaul  of 
financial 
management, 
control and audit

timely 

Ensure 
when  dealing  with 
public 

response 
the 

Average number of days to carry 
out a payment 

43.7 

%  of  mail  answered  within 
standard deadline 

Average 
available posts47  

vacancy 

rate 

of 

70% 

2.5% 
2002) 

42.9 

>80% 

(November 

1.9%  (December 
2003)48 

Promote greater efficiency 

%  of  officials  re-deployed  to 
priority activities per year49 

3.5%  (APS  2003 
Decision) 

5.8%  (APS  2004 
Decision)50 

Improve  implementation  of 
the budget 

Degree of implementation of the 
Budget 
covering 
plan 
commitments and payments per 
budget heading51 

Commitments: 
98% 

Commitments: 
99% 

Payments: 76% 

Payments: 90% 

Ensure  effectiveness  and 
efficiency of operations 

Average number of days to carry 
out a payment 

43.7 

Variation of RAL in %  

13.7% 

Variation of potentially abnormal 
RAL53 

- 

42.952 

4.9%54 

-12% 

47 Data refers to the ‘budget de fonctionnement’ 
48 Taking into account the first wave of early retirement. If the second wave of early retirement is also taken into account, this produces a figure of 1.4%.  
49 The ratio is affected by the enlargement exercise and the number of posts granted by the budgetary authority. The target for this indicator is to have a positive figure (indicating mobility), rather than an increasing percentage. 
50 Includes the confirmation of 2003 frontloading for enlargement as well as additional posts for 2004, which provides for an exceptionally high figure. 
51 Covers the following headings: structural operations, internal policies, external actions and pre-accession aid. 
52 Data represents 72.71 % and 313.174 of the total of payments made in 2003. 
53 Covers the following headings: agriculture, structural operations, internal policies, external actions and pre-accession aid. 
54 Preliminary figure. 

72 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
OBJECTIVE 

PURPOSE 

INDICATOR 

2002 

2003 

Strengthening staff skills 

Average number of training days 
per official 

6.9 (2001)  

8.32 

Bringing about a 
modernised staff 
policy 

Modernise  equal  treatment 
provisions,  social  welfare 
facilities 
and  working 
conditions  

%  of  women  recruited  annually 
at A grade entry level55 

27.6%  

33.3% 

%  of  women  in  management 
positions56 

across 
11.1% 
and  A3
A1,A2 
A1
for 
6.6% 
15.7% 
A2
at 
11.1% for A3 

11.6% 
across 
A1,  A2  and  A3
for  A1
6.6% 
16.7% 
at  A2
11.4% for A3 

Length  of  waiting 
crèches 

lists 

for 

Around 
as 
waiting 
January 2002. 

300 
at 

362 

Number  of  officials  on  part  time 
work 

1077 
total) 

(5.3% 

of 

1349 
total) 

(6% 

of 

55 Source: Equal Opportunities – Monitoring. Data refers to permanent officials on all budgets.  
56 Data refers to permanent officials on all budgets. 

73