Report on the annual accounts of the European Aviation Safety Agency for the 2003 financial year together with the Agency's replies
Date: 2004-09-30
Institutions: European Court of Auditors
Subjects: European Aviation Safety Agency, European Court of Auditors, administration of the Institutions, financial control, interinstitutional relations (EU), operating result, report

30.12.2004

EN

Official Journal of the European Union

C 324/9

on the annual accounts of the European Aviation Safety Agency for the 2003 financial
year together with the Agency’s replies

REPORT

(2004/C 324/02)

CONTENTS

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

OBSERVATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

2-5

6-10

Tables 1-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Agency’s replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10

10

10

11

15

Paragraph

Page

C 324/10

EN

Official Journal of the European Union

30.12.2004

INTRODUCTION

1.
The European Aviation Safety Agency (hereinafter called
the Agency) was established by Council Regulation (EC)
No 1592/2002 of 15 July 2002 (1). The 2003 financial year was
the first in which the Agency actually began to carry out its opera-
tional activities. The Agency’s tasks are to maintain a high level
of civil aviation safety, to ensure the proper functioning and
development of civil aviation safety, to establish certification
specifications and to provide certification of aeronautical prod-
ucts. Table 1 summarises the powers and activities of the Agency
on the basis of information supplied by it.

THE COURT’S OPINION

2.
This opinion is addressed to the European Parliament and
the Council in accordance with Article 185(2) of Council Regu-
lation (EC, Euratom) No 1605/2002 (2).

3.
The Court has examined the annual accounts of the
Agency for the financial year ended 31 December 2003. In accor-
dance with Article 49(1) of Council Regulation (EC)
No 1592/2002 of 15 July 2002, the budget was implemented on
the responsibility of the Executive Director. This responsibility
includes the drawing-up and presentation of the accounts (3) in
accordance with the internal financial provisions adopted on the
basis of Article 52 of the same Regulation. The Court of Auditors
is required under Article 248 of the Treaty establishing the Euro-
pean Community to examine these accounts.

4.
The Court carried out its audit in accordance with its
auditing policies and standards. These have been adapted from
generally accepted international auditing standards to reflect the
specific nature of the Community context. It examined the
accounting documents and applied the audit procedures it con-
sidered necessary in this context.

The Court thus obtained reasonable assurance that the
5.
annual accounts for the financial year ended 31 December 2003
were reliable and that the underlying transactions, taken as a
whole, were legal and regular. The content of the following obser-
vations does not call the audit opinion expressed by the Court in
this report into question.

OBSERVATIONS

6.
The implementation of the appropriations for the finan-
cial year 2003 is set out in Table 2. The Agency’s revenue and
expenditure account and the balance sheet for the financial year
2003 are summarised in Tables 3 and 4.

7.
The Executive Director, who is the authorising officer, is
also empowered to sign banking instructions. This is contrary to
Article 37 of the Agency’s financial regulation.

8.
Article 43(1)(e) of the Agency’s financial regulation stipu-
lates that the accounting officer is to validate the systems laid
down by the authorising officer to supply or justify accounting
information. This validation did not take place during the finan-
cial year.

An examination of the recruitment files revealed that they
9.
contained formal deficiencies and that some documents were
missing. In view of the scale of recruitment forecast between now
and 2006 (around 300 persons), steps must be taken to ensure
improved compliance with the regulatory provisions.

10.
An analysis of the computer system control environment
showed that it requires strengthening in advance of the forecast
increase in the Agency’s activities.

This Report was adopted by the Court of Auditors in Luxembourg at its meeting of 29 and 30 September
2004.

For the Court of Auditors
Juan Manuel FABRA VALLÉS
President

(1) OJ L 240, 7.9.2002, p. 1.
(2) OJ L 248, 16.9.2002, p. 1.
(3) As required by Article 83(3) of the Agency’s financial regulation, the
final accounts for the 2003 financial year were drawn up on 31 March
2004 and forwarded to the Court of Auditors, which received them
on 20 September 2004. A summarised version of these accounts is
presented in the tables annexed to this report.

30.12.2004

EN

Official Journal of the European Union

C 324/11

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C 324/12

EN

Official Journal of the European Union

30.12.2004

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30.12.2004

EN

Official Journal of the European Union

C 324/13

European Aviation Safety Agency — Revenue and expenditure account for the 2003 financial year

Table 3

Revenue
Commission subsidies

Expenditure

Staff — Title I of the budget
Payments
Appropriations carried over

Administration — Title II of the budget
Payments
Appropriations carried over

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

Source: Data from the Agency.

(1 000 euro)

2003

3 725

3 725

680
27

153
396

197
2 486

3 939

– 214

Total revenue (a)

Total expenditure (b)

Outturn for the financial year (a – b)

C 324/14

EN

Official Journal of the European Union

30.12.2004

European Aviation Safety Agency — Balance sheet as at 31 December 2003

Table 4

Assets

2003

Liabilities

Fixed assets

Intangible assets

Computer software

Depreciation

Current assets

Other advances

Sundry accounts receivable

Cash accounts

Bank accounts and cash

Source: Data from the Agency.

Fixed capital

Own capital

Balance for the financial year

Current liabilities

Commission

Automatic carry-overs of appropriations

Sundry accounts payable

Deductions from salaries

10

11

– 5

16

5

1

6

2 727

2 727

2 749

Subtotal

Subtotal

Subtotal

Total

Subtotal

(1 000 euro)

2003

16

– 214

– 198

8

2 909

18

12

Subtotal

2 947

Total

2 749

30.12.2004

EN

Official Journal of the European Union

C 324/15

THE AGENCY’S REPLIES

Until the end of 2003, the Executive Director was the
7.
Agency’s only temporary staff member. In practice, he signed
banking transactions alongside the accountant. Other temporary
staff have been hired during the second half of 2004, eliminating
this incompatibility.

8.
The financial systems were validated by the accountant at
the beginning of February 2004. A computer system for manag-
ing fixed assets, to be implemented by the authorising officer, is
currently being acquired and will be validated at a later stage.

The shortcomings identified by the Court are related to the
9.
fact that the Agency was in its start-up phase. A Human Resources
department with a special recruitment unit was set up in Febru-
ary 2004. It has already implemented procedures and tools. The
Agency is considering setting up a computerised recruitment
management system as of January 2005.

10.
The fact that the Agency is based on the premises of the
Commission has had a major impact on its IT environment. The
Agency will move to its new premises in Cologne in November
2004, which will lead to a considerable improvement in its IT
environment and the implementation of a new computer
architecture.