Report on the annual accounts of Eurojust for the financial year 2005 together with Eurojust's replies
Date: 2006-09-28
Institutions: European Court of Auditors
Subjects: Eurojust, European Court of Auditors, administration of the Institutions, financial control, interinstitutional relations (EU), report

19.12.2006

EN

Official Journal of the European Union

C 312/67

on the annual accounts of Eurojust for the financial year 2005 together
with Eurojust’s replies

REPORT

(2006/C 312/12)

CONTENTS

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

STATEMENT OF ASSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

1-2

3-6

7-11

Tables 1 to 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Eurojust’s replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

68

68

68

70

72

Paragraph

Page

C 312/68

EN

Official Journal of the European Union

19.12.2006

INTRODUCTION

Reliability of the accounts

1.
Eurojust was set up by Council Decision 2002/187/JHA (1)
with a view to stepping up the fight against serious organised
crime. Its objective is to improve the coordination of investiga-
tions and prosecutions covering the territories of several Member
States of the European Union, as well as that of non-member
States.

Eurojust’s accounts for the financial year ended 31 Decem-
ber 2005 are, in all material respects, reliable.

Legality and regularity of the underlying transactions

The transactions underlying Eurojust’s annual accounts, taken
as a whole, are legal and regular.

The observations which follow do not call the Court’s state-
ment into question.

2.
Table 1 summarises Eurojust’s competences and activities.
Key information from the financial statements drawn up by Euro-
just for the financial year 2005 is presented in Tables 2, 3 and 4.

OBSERVATIONS

STATEMENT OF ASSURANCE

This statement is addressed to the European Parliament
to Article 36 of Decision

3.
and the Council pursuant
2002/187/JHA.

Eurojust’s accounts for the financial year ended 31 Decem-
4.
ber 2005 (2) were drawn up by its Administrative Director, pur-
suant to Article 36 of Decision 2002/187/JHA, and sent to the
Court, which is required to give a statement of assurance on their
reliability and on the legality and regularity of the underlying
transactions.

5.
The Court conducted an audit in accordance with its poli-
cies and standards, which are based on international auditing
standards that have been adapted to the Community context. The
audit was planned and performed to obtain reasonable assurance
that the accounts are reliable and that the underlying transactions
are legal and regular.

The Court has thus obtained a reasonable basis for the

6.
statement expressed below.

(1) Decision of 28 February 2002 setting up Eurojust (OJ L 63, 6.3.2002,

p. 1).

7.
A review of the implementation of the budget showed that
90 % of the appropriations granted for the year had been com-
mitted. The overall rate of payment against the year’s commit-
ments was 84 %. Nevertheless, the utilisation rate of appropria-
tions for operating activities (Title III) was low: only 80 % of the
commitment appropriations for the financial year were used and
a third of commitments had to be carried over. For the same
expenditure, more than 15 % of the commitments carried over to
the year had to be cancelled. These findings suggest that a quali-
tative improvement in the programming of operating expendi-
ture is needed in order to avoid mobilising resources unnecessar-
ily. The College decided to authorise a non-automatic carryover
of appropriations for a total of 285 484 euro. Such carryovers are
permitted only if most of the stages preparatory to the act of
commitment have been completed before the end of the finan-
cial year and this was not the case.

8.
Eurojust still does not have its own financial regulation
and, this being the case, has continued to apply the framework
financial regulation for the Community bodies (3). At the end of
2005, the Commission had still not issued an opinion concern-
ing the draft regulation submitted by Eurojust in May of the same
year.

9.
The inventory of fixed assets is managed using a spread-
sheet, which does not allow the integrity of the data to be guar-
anteed. Assets cannot always be traced because information about
where they are located is lacking. No exhaustive physical inven-
tory of fixed assets has been made since Eurojust was set up.

10.
The Management Board has still not adopted any inter-
nal control standards. Formalisation of operating and accounting
procedures is mostly lacking. In 2005, the checklists describing
the checks to be carried out on budgetary commitments relating
to important operating procedures (procurement, and recruit-
ment) were insufficiently developed.

(2) These accounts were drawn up on 29 June 2006 and received by the

(3) Commission Regulation (EC, Euratom) No 2343/2002 of 23 Decem-

Court on 7 July 2006.

ber 2002 (OJ L 357, 31.12.2002, p. 72).

19.12.2006

EN

Official Journal of the European Union

C 312/69

Some anomalies were found in respect of public procure-
11.
ment procedures and contract management, in particular the
absence of guidelines on the weightings applied to award criteria,
and the-
and confusion between the

selection criteria

criteria for awarding contracts. Framework contracts have, more-
over, exceeded the time limits laid down in the regulatory
provisions.

This report was adopted by the Court of Auditors in Luxembourg at
28 September 2006.

its meeting of

For the Court of Auditors
Hubert WEBER
President

Areas of competence stipulated in
the Treaty on European Union

Eurojust’s competences as defined in the Council Decision of
28 February 2002 (2002/187/JHA)

Governance

Resources made available to
Eurojust 2005 (2004)

Activities and services provided 2005 (2004)

Table 1

Eurojust (The Hague)

Third pillar body created by
Council Decision.

Objectives:

Tasks:

Article 3

Articles 5, 6 and 7

Eurojust Decision

Eurojust Decision

The Union’s objective is to pro-
vide citizens with a high level
of safety within an area of free-
dom, security and justice.

The Council encourages coop-
eration through Eurojust by
enabling it to facilitate proper
coordination
the
Member States’ national pros-
ecuting authorities. (Articles 29
and 31)

between

are

the

same

Eurojust’s main areas of respon-
sibility
as
Europol’s, i.e. the fight against
terrorism, organised crime, in
particular drug-trafficking, ille-
gal immigration, illicit vehicle
trafficking,
in
human beings, the counterfeit-
trafficking in
ing of money,
radioactive substances, com-
puter crime, acts detrimental to
the Union’s financial interests
and money-laundering.

trafficking

— to stimulate and improve the
coordination,
the
competent national authorities
of the Member States, of inves-
tigations and prosecutions,

between

— to improve cooperation,

in
particular by facilitating the
exchange
information,
mutual legal assistance and the
implementation of extradition
requests,

of

— to support

the

competent
authorities of
the Member
States in order to render their
investigations
and prosecu-
tions more effective,

1. The College is responsible
for the organisation and opera-
tion of Eurojust.

2. The College is composed of
national members seconded by
each Member State in accor-
dance with its legal system,
being prosecutors,
judges or
police officers of equivalent
competence.

3. The College elects its Presi-
dent from among the national
members.

organise

To
cooperation
between the various national
legal systems, Eurojust acts:

— through its national mem-

bers, or

— as a College.

If the competent authorities
of
the Member State con-
cerned decide not to respond
to the requests which Eurojust
has issued as a College, they
notify Eurojust of their rea-
sons.

4. The Joint Supervisory Body
checks the processing of per-
sonal data.

5. The Administrative Direc-
tor is unanimously appointed
by the College.

2005 final budget:

Number of meetings:

73 (52)

Bilateral cases:

Multilateral cases:

462 (272)

124 (109)

Total number of cases:

588 (381)

Fraud:

Drug-trafficking:

Terrorism:

Murder:

Smuggling:

Trafficking in human
beings:

14 % (20 %)

16 % (20 %)

3 % (7 %)

5 % (7 %)

not available %

4 % (4 %)

Money-laundering:

6 % (7 %)

Other:

52 % (35 %)

13 million euro (9,3 million
euro)

Community subsidy: 100 %
(100 %)

Staff
as
ber 2005:

at 31 Decem-

87 (76) posts listed in the
establishment plan,

posts occupied: 70 (52)

+ 15 (13) other staff (2 sec-
onded national experts, local
staff, 13 employment-agency
staff)

Total staff: 85 (65)

— to provide support with proce-
dures
involving a Member
State and a non-member State,

— to provide support with proce-
involving a Member

dures
State and the Community.

6. External audit: the European
Court of Auditors.

assigned to the
duties:

following

7. Discharge is given by the Par-
liament on the Council’s recom-
mendation.

operational tasks: 31 (27)

administrative tasks: 41 (26)

mixed tasks 13 (12)

Source:

Information supplied by Eurojust.

C
3
1
2
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7
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EUROJUST

Table 2

Implementation of the budget for the financial year 2005

.

1
9
1
2
2
0
0
6

.

Revenue

Revenue entered
under the final
budget for the
financial year

Revenue received

Allocation of expenditure

Appropriations under the final budget

Expenditure

Appropriations carried
over from the previous
financial year

(1 000 euro)

E
N

Appropriations for the current financial year
and carried over from the previous financial year

final

commit-
ted

paid

carried
over

cancelled available

paid

cancelled available

commit-
ted

paid

carried
over

cancelled

Source of revenue

Community
subsidies
Other revenue

13 000

13 000
8

Total

13 000

13 008

Table 3

Title I
Staff
Title II
Administration
Title III
Operating activities

5 419

5 196

5 084

112

223

88

83

3 380

3 207

2 591

723

66

434

426

3 377
4 201
Total 13 000 11 780

2 276
9 951

1 280
2 115

645
934

345
867

291
800

5 507

5 284

5 167

112

228

3 814

3 641

3 017

723

74

4 546

2 567
3 722
13 867 12 647 10 751

1 280
2 115

699
1 001

5

8

54
67

Table 4

Revenue and expenditure account for the financial year 2005 (1)

Balance sheet at 31 December 2005 and 2004 (1)

Operating revenue
Community subsidies
Other subsidies/revenue

Operating expenditure
Staff
Administration
Operating activities

Other income (d)
Other charges (e)

(1 000 euro)

2005

11 991
59
12 050

5 149
3 308
2 054
10 511
1 539
0
3
1 536

Total (a)

Total (b)
Operating result (c = a – b)

Economic result (f = c + d – e)

(1) The figures for the financial year 2004 are not given because they are not comparable to the 2005 figures because

of a change in the accounting methods used.

Source:

Eurojust data — These tables summarise the data supplied by Eurojust in its annual accounts.

Assets
Fixed assets
Receivables
Cash and cash equivalents

Liabilities
Accumulated surplus/deficit
Economic result for the year
Current liabilities

(1 000 euro)

2005

2004

1 773
159
3 130
5 062

1 842
1 536
1 684
5 062

Total

Total

1 455
152
2 082
3 689

1 669
173
1 847
3 689

(1) The data for the financial year 2004 have been restated to allow for comparison with those for 2005.

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3
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2
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7
1

C 312/72

EN

Official Journal of the European Union

19.12.2006

EUROJUST’S REPLIES

Eurojust would like to emphasize that its volume of activ-
7.
ity depends heavily on the number of cases referred by the Mem-
ber States. Therefore, the programming of allocation of its
resources has a highly indicative and approximate character.
Moreover, the allocation in December 2004 of 2 million euro for
Eurojust’s operational activities has had a negative impact on our
level of execution on title 3.

Eurojust prioritised the setting up of an asset inventory
9.
system to meet the accounting obligations. An exhaustive inven-
tory database is currently being implemented.

10.
The Authorising Officer has submitted standards of inter-
nal control based on the ones adopted by the Commission to the
College of Eurojust for adoption during the last quarter of 2006.

Eurojust will apply strictly the applicable regulation in its future
decisions relating to the non-automatic carry-over procedure.

In 2006, on the basis of its experience, Eurojust has started
to improve the checklists in use for its main budgetary operations.

8.
The consultations with the Commission on Eurojust’s draft
financial regulation have been concluded and the agreed text has
been adopted by the College on 20 April 2006.

11.
Eurojust has improved its tender procedures in view to
make a clearer distinction between selection and award criteria.
None of the contracts mentioned by the Court will be used after
the permitted four-year period.