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

C 312/24

EN

Official Journal of the European Union

19.12.2006

on the annual accounts of the European Agency for Safety and Health at
Work for the financial year 2005 together with the Agency’s replies

REPORT

(2006/C 312/05)

CONTENTS

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

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

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

1-2

3-6

7-10

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

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

25

25

25

27

29

Paragraph

Page

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Official Journal of the European Union

C 312/25

INTRODUCTION

The Court has thus obtained a reasonable basis for the

6.
statement expressed below.

The European Agency for Safety and Health at Work
1.
(hereinafter referred to as the Agency) was established by Council
Regulation (EC) No 2062/94 of 18 July 1994 (1). The Agency’s
task is to collect and disseminate information on national
and Community priorities in the field of safety and health at work,
to support national and Community organisations involved in the
formulation and implementation of policy and to provide infor-
mation on preventive measures.

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

Reliability of the accounts

The Agency’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 Agency’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.

STATEMENT OF ASSURANCE

OBSERVATIONS

This Statement is addressed to the European Parliament
3.
and the Council in accordance with Article 185(2) of Council
Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 (2); it
was drawn up following an examination of the Agency’s accounts,
as required by Article 248 of the Treaty establishing the European
Community.

4.
The Agency’s accounts for the financial year ended
31 December 2005 (3) were drawn up by its Director, pursuant
to Article 14 of Regulation (EC) No 2062/94, 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.

(1) OJ L 216, 20.8.1994, p. 1. The Regulation was last amended by Coun-
cil Regulation (EC) No 1112/2005 of 24 June 2005 (OJ L 184,
15.7.2005, p. 5).

(2) OJ L 248, 16.9.2002, p. 1.
(3) These accounts were drawn up on 29 June 2006 and received by the

Court on 4 July 2006.

7.
The commitment rate for appropriations entered in the
budget for the financial year 2005 was over 90 %. Nevertheless,
the carry-over rate remained high for operating expenditure (Title
III), at 30 %, whereas the cancellation rate for appropriations car-
ried over was close to 15 %. Such a situation should prompt the
Agency to improve its programming and adhere to it more
strictly. The management of the budget shows a high number of
transfers of appropriations between budget lines. The supporting
documentation for these transfers is inadequate. Moreover,
no control mechanism has been put in place to check that the
rules and limits applicable to transfers are observed.

Implementation of the internal control system was not yet
8.
complete in 2005. The Governing Board has not adopted any
internal control standards. The questionnaires used for ex ante
verification of commitments and payments do not cover the
operational aspects. There is no risk analysis and there are
no checklists to meet the needs of authorising officers and staff
who perform operational checks.

The general

9.
implementing provisions concerning the
recruitment of staff to the Agency do not specify the criteria and
formalities to be observed at the various stages in the selection of
candidates. A review of one recruitment procedure showed that
the choices made had not been adequately documented (only a
final summary report was drawn up and signed by the members
of the selection board). Decisions taken in this area must be rig-
to ensure the transparency
orously documented in order
and impartiality of the decisions made.

C 312/26

EN

Official Journal of the European Union

19.12.2006

The Court’s examination of public procurement proce-
10.
dures showed that often no supporting evidence was given for the
tender evaluation committee’s assessments of the quality of the
bids. Furthermore, the evaluation reports are signed only by the

authorising officer responsible and not by all the members of the
tender evaluation committee. In order that the principle of trans-
parency may be respected, decisions taken during a tendering
procedure must be rigorously documented.

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

Table 1

European Agency for Safety and Health at Work (Bilbao)

Areas of Community competence
deriving from the Treaty

Competences of the Agency as defined in the Council Regulation
(Council Regulation (EC) No 2062/94 of 18 July 1994 as last amended
by Council Regulation (EC) No 1112/2005 of 24 June 2005)

Governance

Resources made available
to the Agency in 2005
(2004)

Products and services supplied

Social provisions

Objectives:

Tasks:

1. Governing Board

Final budget:

Building the links — Networking:

The Community and the Mem-
ber States (…) shall have as their
objectives (…) improved living
and working conditions, so as to
make possible their harmonisa-
tion while the improvement is
being maintained (…).

shall

With a view to achieving the
objectives of Article 136, the
Community
support
and complement the activities of
the Member States in the follow-
ing fields: (a) improvement in
particular of the working envi-
to protect workers’
ronment
health and safety; (b) working
conditions; (…)

(Extracts
and 137 of the Treaty)

from Articles

136

strategies

In order to improve the work-
ing environment, as regards the
protection of the safety and
health of workers as provided
for in the Treaty and successive
Community
and
action programmes concern-
ing health and safety at the
workplace,
the
Agency shall be to provide the
Community bodies, the Mem-
ber States, the social partners
and those involved in the field
with the technical, scientific
and economic information of
use in the field of safety and
health at work.

the aim of

Source:

Information provided by the Agency.

— to collect, analyse and dis-
seminate information on
national and Community
priorities and on research,

— to promote cooperation
and the exchange of infor-
mation, including informa-
tion
pro-
on
grammes,

training

— to supply the Community
bodies and the Member
States with information
they require to formulate
and implement policies, in
particular as regards the
impact
and
medium-sized enterprises,

small

on

— to make available informa-
tion on preventive activi-
ties,

— to contribute to the devel-
strategies
of
action

opment
and Community
programmes,

— to set up a network com-
focal

prising
points and topic centres.

national

— 13,7 million euro
(10,7 million euro)

Including:

— Community subsidy, DG
Employment: 96 % (98 %)

— Community subsidy, DG
Enlargement: 3 % (0 %)

Staff at 31 December:

40 (38) posts in the establish-
ment plan,

of which, posts filled: 32 (29)

20 (22) other posts (auxiliary
contracts, seconded national
experts,
and
local
employment-agency staff).

staff

— further development of focal point net-
work (implementation of 2nd generation
network),

— institutional capacity building in Candi-
date Countries (PHARE programme).

Communicating Information:

— European Week 2005 campaign on Noise
finishing with a European summit in Bil-
bao,

— 3rd generation web-based information
safety and

services on occupational
health,

— launch of global occupational safety and

health portal,

— targeted campaign programme for EU 10.

Total staff: 52 (51)

Developing knowledge:

assigned to

operational tasks: 35 (34)
administrative tasks: 9 (9)
mixed tasks: 8 (8)

— information products for national and
European Week campaigns 2005 (on
Noise) and 2006 (on Young People),
— information products on good practice in

agriculture,

— risk Observatory information products
(e.g. reports on noise, MSD and stress,
web information on construction and
agriculture, among other topics; identifi-
cation of emerging biological and chemi-
cal risks).

Composition

— 1 representative of

the
Government of each Mem-
ber State,

— 1 representative of

the
employers’ organisations of
each Member State,

— 1 representative of

the
employees’ organisations
of each Member State,

— 3 representatives of

the

Commission.

Task

To adopt the Agency’s work
programme,
and
budget
annual general report.

2. The Director

Appointed by the Governing
Board on a proposal from the
Commission.

3. Committees
Obligatory consultation of the
Commission and the Advisory
Committee on Safety
and
Health at Work in respect of
the work programme.

4. External audit
Court of Auditors.

5. Discharge authority
Parliament on a recommenda-
tion by the Council.

.

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EUROPEAN AGENCY FOR SAFETY AND HEALTH AT WORK

Table 2

Implementation of the budget for the financial year 2005

Revenue collected

Expenditure allocation

Final budget appropriations

Expenditure

Appropriations carried over
from the previous financial
year

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

(1 000 euro)

13 200

12 208

358

180

340

217

Title I
Staff

Title II
Administration

Title III
Operating activities

Phare

final

commit-
ted

paid

carried
over

cancelled available

paid

cancelled available

commit-
ted

paid

carried
over

cancelled

1 087

4 579

3 796

3 435

75

1 069

60

42

1 501

1 406

1 052

331

118

248

187

7 300

7 090

4 589

2 213

498

2 549

2 224

358

172

133

225

—

0

0

18

61

325

—

4 639

3 856

3 477

75

1 749

1 654

1 239

331

179

9 849

9 639

6 813

2 213

358

172

133

225

823

—

Revenue

Revenue entered
in the final budget
for the financial
year

Source of revenue

Community
subsidies

Phare

Other revenue

Total

13 738

12 765

Total 13 738 12 464

9 209

2 844

1 685

2 857

2 453

404

16 595 15 321 11 662

2 844

2 089

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

Balance sheet at 31 December 2005 and 2004 (1)

Table 3

Table 4

Operating revenue
Community subsidies
Other subsidies/revenue

Operating expenses
Staff
Administration
Operating activities

Other income (d)
Other charges (e)

(1 000 euro)

2005

13 673
92
13 765

3 312
1 679
8 584
13 575
190
0
7
183

Total (a)

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

Economic result (f = c + d – e)

(1) Data for the financial year 2004 are not shown as they are not comparable with the data for 2005 because of the

change in the accounting principles applied.

Source: Data compiled by the Agency. These tables summarise the data supplied by the Agency in its annual accounts.

Assets
Fixed Assets
Receivables
Cash and cash equivalents

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

2005

339
596
3 392
4 327

1 637
183
2 507
4 327

Total

Total

(1 000 euro)

2004

325
426
3 117
3 868

1 637
0
2 231
3 868

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

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.

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Official Journal of the European Union

C 312/29

THE AGENCY’S REPLIES

The Agency is in the process of improving its financial
7.
management. Its global carry-over rate has been reduced from
27 % in 2004 to 20 % in 2005 and cancellation of carry-overs
has been reduced from nearly 900 000 euros in 2004 to about
400 000 euros in 2005. Concerning the transfer of appropria-
tions, the Agency is taking measures to improve its budget
management.

8.
Internal Control Standards have been adopted by the Gov-
erning Board in March 2006. Operational verification of transac-
tions is done by each unit in accordance with the nature of the

operation. This procedure will be formalized. The Agency is
developing a systematic approach to risk analysis.

9.
For each competition the criteria for the pre-selection of
candidates to be interviewed are agreed by a Selection Commit-
tee nominated by the Director. Nevertheless, the Agency is taking
measures to improve the documentation of
the selection
processes.

The Agency is taking measures to improve the documen-

10.
tation of contract processes.