Report on the annual accounts of the Community Plant Variety Office for the financial year 2005 together with the Office's replies
Date: 2006-09-28
Institutions: European Court of Auditors
Subjects: Community Plant Variety Office, 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 312/99

REPORT

on the annual accounts of the Community Plant Variety Office for the
financial year 2005 together with the Office’s replies

(2006/C 312/17)

CONTENTS

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

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

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

Paragraph

1-2

3-6

7-10

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

The Office’s replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

100

100

100

102

105

C 312/100

EN

Official Journal of the European Union

19.12.2006

INTRODUCTION

Reliability of the accounts

The Community Plant Variety Office (hereinafter the
1.
Office) was created by Council Regulation (EC) No 2100/94 of
27 July 1994 (1). Its main task is to register and examine applica-
tions for the grant of Community industrial property rights for
plant varieties and to ensure that the necessary technical exami-
nations are carried out by the competent offices in the Member
States.

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

STATEMENT OF ASSURANCE

3.
This Statement is addressed to the Administrative Council
of the Office in accordance with Article 111 of Council Regula-
tion (EC) No 2100/94.

The Office’s accounts for

4.
the financial year ended
31 December 2005 (2) were drawn up by its President, pursuant
to Article 112 of Regulation (EC) No 2100/94, 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 the underlying transactions are
legal and regular.

The Office’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 the Office’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.

OBSERVATIONS

7.
The Office’s budget for the financial year 2005 does not
observe the principle of equilibrium between revenue and pay-
ment appropriations. As regards the implementation of the bud-
get, the overall level of utilisation of the payment appropriations
for the financial year was 85 %. The same appropriations gave rise
to cancellations for operating activities (9 %) and especially
administrative expenditure (20 %). These factors show that the
Office should improve the planning and follow-up of its work to
prevent appropriations from being needlessly mobilised.

8.
In 2005, numerous difficulties affected the production of
the annual accounts, and it was not possible to supply full
accounts within the regulatory deadlines. The Office does not
have reliable tools to reconcile the data in its financial manage-
ment systems (budgetary and general accounting, register of plant
varieties). This situation increases the risks of errors in the
accounts.

The Court has thus obtained a reasonable basis for the

6.
statement expressed below.

9.
General implementing rules governing the recruitment
and grading of staff should be adopted (3) to guarantee the objec-
tive and transparent assessment of candidates. An examination of
recruitment procedures revealed that the criteria for assessing
candidates were not determined beforehand.

(1) OJ L 227, 1.9.1994, p. 27.
(2) These accounts were drawn up on 21 June 2006 and received by the

Court on 4 July 2006.

(3) Article 110 of the Staff Regulations of officials and Article 12(5) of the

Conditions of Employment of Other Servants.

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Official Journal of the European Union

C 312/101

Anomalies were found in the award of contracts. In three
10.
of the 12 evaluation procedures that were examined, the dead-
line for delivery, although adopted as a criterion for awarding
contracts, was not taken into consideration when selecting the

successful bids (1). Two framework contracts were concluded for
a maximum period of five years although this period may not
exceed four years.

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

(1) Article 117(1) of the implementing rules for the Financial Regulation
(for the decentralised bodies, the procedures for awarding contracts
are governed by the general Financial Regulation and its implement-
ing rules (Council Regulation (EC, Euratom) No 1605/2002 of
25 June 2002 (OJ L 248, 16.9.2002), and Commission Regulation
(EC, Euratom) No 2342/2002 of 23 December 2002 (OJ L 357,
31.12.2002)).

Areas of Community competence
deriving from the Treaty

Competences of the Office as defined in Council Regulation (EC)
No 2100/94 of 27 July 1994

Governance

Table 1

Community Plant Variety Office (Angers)

Free movement of goods

Objectives:

Tasks:

to apply the system of Commu-
nity plant variety rights as the
sole and exclusive form of Com-
munity industrial property rights
for plant varieties.

Prohibitions or restrictions justi-
fied on grounds of the protection
of industrial and commercial prop-
erty shall not constitute a means of
arbitrary discrimination or a dis-
guised restriction on trade between
the Member States.

(Extract from Article 30 of the Treaty)

— to decide whether to refuse or
grant applications for Com-
munity plant variety rights,

— to decide on objections,

— to decide on appeals,

— to decide on the revocation
or cancellation of a Commu-
nity plant variety right.

1. The President directs the
Office. He is appointed by the
Council from a list of candidates
proposed by the Commission
after obtaining the opinion of the
Administrative Council.

2. The Administrative Council
oversees the Office’s work pro-
gramme and draws up rules gov-
the Office’s working
erning
methods. It is composed of one
representative of each Member
State and one representative of
the Commission, plus their alter-
nates.

3. Decisions regarding the grant
of Community plant variety
rights are adopted by commit-
tees composed of three members
of staff of the Office and by the
Board of Appeal in appeal pro-
ceedings.

4. The Commission’s control:
review of the legality of acts by
the President for which Commu-
nity legislation provides no judi-
cial review by any other body, as
well as the legality of acts by the
Administrative
in
respect of the Office’s budget.

Council

5. External control: Court of
Auditors.

6. Discharge Authority:
Administrative Council.

Source:

Information supplied by the Office.

Resources made available to the
Office in 2005
(2004)

Products and services
supplied in 2005
(2004)

Final budget

Applications heard: 2 734 (2 651)

13,4 (11,3) million euro

Rights granted: 2 178 (2 178)

Staff numbers as at 31 Decem-
ber:

Community rights
31.12.2005: 11 231 (10 191)

in force at

Number of posts in establish-
ment plan: 40 (38)

Posts occupied: 40 (36)

+ 5 (4) other posts (auxiliary con-
tracts, national experts on sec-
local staff, employ-
ondment,
ment agency staff)

Total staff: 45 (40)

Assigned to the following duties:

operational:

19 (16)

administrative:

20 (8)

mixed:

6 (6)

C
3
1
2
/
1
0
2

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.

1
9
1
2
2
0
0
6

.

.

1
9
1
2
2
0
0
6

.

COMMUNITY PLANT VARIETY OFFICE

Implementation of the budget for the financial year 2005

Table 2

Revenue

Expenditure

(1 000 euro)

Source of revenue

Revenue entered
in the final budget
for the financial
year

Revenue
collected

Own revenue

13 113

8 848

Community sub-
sidies

Other revenue

0

333

0

654

Allocation of expenditure

Final budget appropriations

Appropriations carried over
from the previous financial
year

Appropriations available
(appropriations of the financial year and previous
financial year)

entered

com-
mitted

paid

carried
over

can-
celled

avail-
able

paid

can-
celled

avail-
able

com-
mitted

paid

carried
over

cancelled

Title I
Staff (NDA)

Title II
Administration (NDA)

Titre III
Operating activities (DA)

4 307

4 284

4 237

47

23

38

32

6

4 345

4 322

4 269

47

29

3 608

2 846

2 190

630

762

705

583

122

4 313

3 551

2 773

630

884

— CA

— PA

5 531

5 320

0

4 414

0

4 002

Total CE 13 446 12 450

0

Total

13 446

9 502

Total CP 12 329

0 10 429

NDA: non-differentiated appropriations (commitment appropriations equal payment appropriations).
DA:
CA:
PA:

differentiated appropriations (commitment appropriations may differ from payment appropriations).
commitment appropriations in a system of differentiated appropriations.
payment appropriations in a system of differentiated appropriations.

0

0

677

677

211

412

996

1 197

0

0

743

743

0

0

0

615

0

0

128

128

5 531

5 320

0

4 414

0

4 002

14 189 13 193

0

13 072

0 11 044

0

0

677

677

211

412

1 124

1 325

E
N

O

f
f
i
c
i
a
l

J
o
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n
a
l

o
f

t
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e

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a
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U
n
o
n

i

C
3
1
2
/
1
0
3

C 312/104

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Official Journal of the European Union

19.12.2006

COMMUNITY PLANT VARIETY OFFICE

Table 3
Revenue and expenditure account for the financial year 2005 (1)

Operating revenue

Revenue

Operating expenditure

Staff

Administration

Operating activities

Other income (d)

Other charges (e)

(1 000 euro)

2005

7 885

7 885

4 226

1 485

3 972

9 683

Total (a)

Total (b)

Operating outturn (c = a – b)

– 1 798

367

0

Economic result (f = c + d – e)

– 1 431

(1) The figures for the financial year 2004 are not given since they are not comparable to those for the financial year 2005 due to a change

in the accounting methods applied.

Table 4

Balance sheet at 31 December 2005 (1)

Assets

Fixed assets

Short-term receivables

Cash accounts

Liabilities

Results accumulated from previous financial years

Economic result of the year

Short-term debts

(1 000 euro)

2005

3 513

897

19 111

23 521

17 621

– 1 431

7 331

23 521

Total

Total

(1) The figures for the financial year 2004 are not given since they are not comparable to those for 2005 due to a change in the accounting

methods applied.

Source: Office data — These tables summarise the data supplied by the Office in its annual accounts.

19.12.2006

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Official Journal of the European Union

C 312/105

THE OFFICE’S REPLIES

Once again, the 2005 budget was drawn up in accordance
7.
with the principle of equilibrium between revenue and commit-
ment appropriations. The 2006 budget is in line with the prin-
ciple of equilibrium between payment appropriations and rev-
enue. The implementation of the expenditure provided for
depends in part on economic factors which are out of the Office’s
control. With that in mind, the Office’s consistent policy has been
to allow room for manoeuvre to prevent having to call on the
budgetary authority too often.

The Office is currently acquiring automated tools for data
9.
alignment. Although some alignments are still carried out manu-
ally, the risk of error mentioned by the Court has yet to
materialise.

The general implementing provisions are currently under
10.
discussion by the Commission and the agencies for adoption in
the near future. As regards recruitment procedures, the Office will
ensure that the application of the evaluation criteria used in
vacancy notices is documented.

8.
The situation described by the Court is the result of acci-
dental factors. The Office will take steps to ensure that in the
future, the presentation of accounts is entirely in line with stan-
dards and implemented within the time limits laid down.

11.
The Office will remind the evaluation committees of the
need to comply fully with the specified criteria. The CPVO has
taken note of the comments made and will ensure that the regu-
lations are complied with in full.