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

C 312/54

EN

Official Journal of the European Union

19.12.2006

on the annual accounts of the European Centre for Disease Prevention
and Control for the financial year 2005 together with the Centre’s replies

REPORT

(2006/C 312/10)

CONTENTS

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

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

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

1-2

3-6

7-12

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

The Centre’s replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55

55

55

57

59

Paragraph

Page

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INTRODUCTION

The Court has thus obtained a reasonable basis for the

6.
statement expressed below.

The European Centre for Disease Prevention and Control
1.
(hereinafter
the Centre) was created by Regulation (EC)
No 851/2004 of the European Parliament and of the Council of
21 April 2004 (1). Its main tasks are to collect and disseminate
data on the prevention and control of human disease and to pro-
vide scientific opinions on this subject. It is also required to coor-
dinate the European networking of bodies operating in this field.
The Centre became autonomous as of the second half of 2005 (2).

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

STATEMENT OF ASSURANCE

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 (3); it was drawn up fol-
lowing an examination of the Centre’s accounts, as required by
Article 248 of the Treaty establishing the European Community.

The Centre’s accounts for the financial year ended
4.
31 December 2005 (4) were drawn up by its Director, pursuant
to Article 23 of Regulation (EC) No 851/2004, 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 142, 30.4.2004, p. 1.
(2) The task of paying the salaries continued to be carried out by the
Commission on the basis of a delegation of powers issued by the
Director.

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

Court on 4 July 2006.

Reliability of the accounts

The Centre’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 Centre’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 implementation of the budget for the financial year
2005 was marked by a low rate of commitment (84 %) and a sub-
stantial rate of carry-over (35 % overall and almost 90 % for oper-
ating expenditure). This situation was in part due to problems
inherent in the Centre’s start-up period. In future, the Centre
should be vigilant concerning the risk of mobilising resources
unnecessarily, in particular by ensuring strict programming of its
activities.

The Court noted that no activity-based management had
8.
been brought in, despite the Centre’s financial regulation making
provision for its introduction, on the lines of that applied to the
general budget, with a view to improving the monitoring of per-
formance. In this context, achieving the Centre’s aims should not
mean merely carrying out a series of tasks. It should rather be
seen as contributing to the goals laid down in its basic Regula-
tion. The Centre’s work programme should, in principle, express
this contribution in operational and measurable terms.

9.
Requests to the Commission for the payment of subsidies
should be justified by a forecast of cash needs (5). The Centre had
no system for producing such forecasts.

10.
The Centre’s financial regulation stipulates that the
authorising officer should make a budgetary commitment before
entering into a legal commitment vis-à-vis third parties. However,
no budgetary commitments were made for the Centre’s expendi-
ture in 2005 prior to the legal commitment. During the same
period, all the Centre’s payments were made by the accounting
officer without the authorising officer having issued any payment
orders (6).

(5) Article 50 of the Centre’s financial regulation.
(6) Article 66 of the Centre’s financial regulation.

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Contrary to the provisions of the regulations, the Cen-
11.
tre’s accounts were not kept by the double-entry method during
2005, thus creating risks of errors.

12.
There were shortcomings in the documentation of the
Centre’s staff selection procedures (lack of formalisation of deci-

sions on the appointment and composition of selection boards,
lack of final report by selection boards on their work). During this
period when it is recruiting its core staff, the Centre should be
particularly attentive to strict application of
its selection
procedures.

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 Centre for Disease Prevention and Control

.

1
9
1
2
2
0
0
6

.

Area of Community competence
deriving from the Treaty

Competences of the Centre as specified in Council Regulation (EC)
No 851/2004

Governance

Resources available
to the Centre

Products and services
supplied in 2005

E
N

Objectives:

Tasks:

1. Management Board

2005 final budget

— Protocols developed for evaluating

— operate dedicated disease
surveillance networks and
enhance networking activi-
ties. The Centre has a specific
role in data collection, vali-
dation, analysis and dissemi-
nation,

— provide authoritative expert
advice and scientific opin-
ions and studies in commu-
nicable diseases,

— operate the Early Warning
System
and
Response
(EWRS). Develop procedures
for
emerging
health threats,

identifying

— strengthen Member States’
in preparedness

capacity
planning and in training,

— inform the general public
and interested parties of its
work.

activities.

A high level of human health
protection shall be ensured in
the definition and implementa-
tion of all Community policies
and
Community
action, which shall complement
shall
national
be
policies,
improving
directed towards
public
preventing
human illness and diseases, and
obviating sources of danger to
human health. Such action shall
cover the fight against the major
health scourges, by promoting
research into their causes, their
transmission and their preven-
tion, as well as health informa-
tion and education.

health,

to

identify,

Strengthen Europe’s defences
against infectious diseases; spe-
cifically,
assess
and communicate current and
emerging threats
to human
health from communicable dis-
eases.

Therefore the Centre shall oper-
ate dedicated surveillance net-
works, provide scientific opin-
ions, operate the early warning
and response system and pro-
vide
and technical
scientific
assistance and training.

(Article 152 of the Treaty)

Source:

Information supplied by the Centre.

4,85 million euro,
Community subsidy of 98 %

including a

networks,

One member designated by each
Member State,
two members
designated by the European Par-
liament and three representatives
of the Commission.

The Board adopts the Centre’s
annual programme and budget
and follows their implementa-
tion.

2. Director

Appointed by the Management
Board on the basis of a list of
candidates proposed by the
Commission.

Staff numbers

Posts in the establishment plan:
29

posts occupied: 22

+ 20 other posts.

Total staff: 42

assigned to the following duties:

operational: 17

3. Advisory Forum

administrative: 25

A representative of each Member
State and three non-voting rep-
resentatives of the Commission.

The Forum is to assure the scien-
tific excellence of the work and
the independence of the activi-
ties and opinions of the Centre.

4. External Audit

Court of Auditors.

5. Discharge authority

Parliament on a recommenda-
tion from the Council.

— planning document prepared for
surveillance

future strategy for
activities in Europe,

— scientific panels established for all
6 disease groups listed in Decision
2119/98/EC,

— expert opinions and guidelines pre-

pared on avian influenza,

— responsibility for the EWRS (102
reported

public health events
and reviewed),

— protocols and guidelines developed
for mobilising outbreak assistance
teams,

— 2 outbreak assistance missions,

— procedure for coordination of pub-
lic health threats defined and in
(Commission, Member
place
States, WHO),

— 21 weekly epidemiological reports
disseminated through the Eurosur-
veillance journal.

O

f
f
i
c
i
a
l

J
o
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r
n
a
l

o
f

t
h
e

E
u
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o
p
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a
n
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n
o
n

i

C
3
1
2
/
5
7

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EUROPEAN CENTRE FOR DISEASE PREVENTION AND CONTROL

Table 2

Implementation of the budget for the financial year 2005

Revenue

Revenue entered in
the final budget for
the financial year

Revenue received

Allocation of expenditure

(1 000 euro)

Expenditure

Final budget appropriations

entered

commit-
ted

paid

carried
over

cancelled

Source of revenue

Community
subsidies (1)

4 852

3 402

Total

4 852

3 402

(1)

Including the appropriations managed by the Commission.

Title I
Staff
Title II
Administration
Title III
Operating activities

2 531

2 282

1 895

1 238

1 174

638

362

535

1 083
4 852

610
4 066

70
2 603

541
1 438

Total

274

65

472
811

Revenue and expenditure account for the financial year 2005

Table 3

Operating revenue
Community subsidies
Other subsidies/revenue

Operating expenditure
Staff
Administration
Operating activities

Other income (d)
Other charges (e)

Assets
Fixed assets
Receivables
Cash and cash equivalents

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

Total (a)

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

Economic result (f = c + d – e)

Table 4

Balance sheet at 31 December 2005

Total

Total

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

(1 000 euro)

2005

2 646
0
2 646

171
1 185
326
1 682
964
0
11
953

(1 000 euro)

2005

245
320
2 059
2 624

0
953
1 671
2 624

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THE CENTRE’S REPLIES

The main causes of the relatively low budget execution
7.
and the high percentage of the carry-over appropriations were
related to the start-up phase of the Centre. ECDC is rapidly pro-
gressing and is focusing on its planning for the best possible use
of the funds allocated to it during 2006.

8.
The basis for an activity based planning has been estab-
lished in the second half of 2005. During 2006, the Centre is
gradually putting in place the necessary reporting systems and
processes to assure reliable and transparent activity based
reporting.

9.
The Centre did not have an adequate system for monitor-
ing cash needs during 2005 for reasons relating to its start up
phase. As of February 2006, basic projections on cash needs were
introduced, and as the Centre further develops its reporting sys-
tems the cash flow projections will be further refined.

10.
The situation described by the Court was initially caused
by an absence of relevant ICT tools at the disposal of the Centre.

The setting up of a financial system was prepared for in 2005
and it became fully operational in early 2006. No automated pay-
ment orders could be produced in 2005 due to the absence of ICT
budget system. Nevertheless payments were only processed after
the assurance that relevant information, authorisations and sig-
natures were in place. From 2006 onwards, payment orders are
systematically processed and approved for to all payments.

11.
In the start up period of 2005, ECDC did not dispose of
a computerised accounting system. During 2006 the Centre
installed all the necessary software and is now operating a fully
computerised accounting system.

Following the Court’s remark, the recruitment processes
12.
are now more extensively documented and consistently forma-
lised. A strong Human Resources recruitment capacity has been
prioritised as to assure that, in the build up phase of the Centre,
the recruitment process is transparent and rigorous.