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

C 312/48

EN

Official Journal of the European Union

19.12.2006

REPORT

on the annual accounts of the Translation Centre for the Bodies of the
European Union for the financial year 2005 together with the Centre’s
replies

(2006/C 312/09)

CONTENTS

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

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

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

1-2

3-6

7-10

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

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

49

49

49

51

53

Paragraph

Page

19.12.2006

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Official Journal of the European Union

C 312/49

INTRODUCTION

The Court has thus obtained a reasonable basis for the

6.
Statement set out below.

1.
The Translation Centre for the Bodies of the European
Union (hereinafter the Centre) was established by Council Regu-
lation (EC) No 2965/94 (1). The Centre’s role is to provide the EU
bodies, and any other EU institutions and bodies which call upon
its services, with the translation services necessary for their
activities.

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.

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

STATEMENT OF ASSURANCE

OBSERVATIONS

3.
This Statement is addressed to the European Parliament
and the Council in accordance with Article 185(2) of Council
Regulation (EC, Euratom) No 1605/2002 (2); 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.

4.
The Centre’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 2965/94, and sent to the
Court, which is required to give its opinion 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 314, 7.12.1994, p. 1.
(2) OJ L 248, 16.9.2002, p. 1.
(3) These accounts were drawn up on 6 July 2006 and received by the

Court on 11 July 2006.

For the financial year 2005, the overall rate of implemen-
7.
tation for commitment appropriations was over 90 % and the
same was true for payment appropriations. Nevertheless, under-
utilisation was noted with regard to expenditure on administra-
tion (Title II), less than 75 % of the appropriations for which were
committed, and 24 % of commitments were carried over. Further-
more, for the same expenditure, more than 50 % of the total com-
mitments carried over from the previous year were cancelled.
Such a situation indicates a qualitative weakness in the program-
ming of administrative expenditure.

The appropriations for freelance translators’ fees of seven
8.
million euro, more than a quarter of the budget, are committed
in the form of several global commitments. These commitments,
as such, are subject to ex ante verification and subsequently give
rise to specific commitments to many individual service-
providers. However, these specific commitments, for amounts
which may not be negligible, are not subject to ex ante verifica-
tion. In view of the associated risks, these specific commitments
should also be subject to ex ante verification.

The Centre is responsible for administering and develop-
9.
ing a database (IATE) in conjunction with the EU Institutions,
which meet part of the costs. The agreement on the division of
costs associated with IATE says nothing about intellectual prop-
erty rights. This omission must be rectified so that account can be
taken of its value in the assets of the Institutions concerned.

C 312/50

EN

Official Journal of the European Union

19.12.2006

In its Annual Report on the Centre for the financial year
10.
2004, the Court made an observation concerning the long-
standing conflict between the Commission and the Centre about

the Centre’s payment of the employer’s portion of pension con-
tributions for its staff. The Court reiterates its call for this conflict
to be settled as soon as possible.

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

Translation Centre for the Bodies of the European Union (Luxembourg)

Table 1

.

1
9
1
2
2
0
0
6

.

Areas of Community competence

Competences of the Centre
Council Regulation (EC) No 2965/94 of 28 November 1994

Governance

Resources made available
to the Centre in 2005
(2004)

Products and services provided during
the financial year 2005
(2004)

E
N

Objectives:

Tasks:

1. Management Board

Final budget

Number of pages translated

The representatives of the Mem-
ber States’ governments adopted
by mutual agreement a declara-
tion concerning the creation,
under the aegis of the Commis-
sion’s translation departments in
Luxembourg, of a Translation
Centre for the bodies of
the
Union, which would provide the
necessary translation services for
the operation of the bodies and
services whose seats were estab-
lished
the Decision of
by
29 October 1993.

to provide the necessary transla-
tion services for the operation of
the following bodies:

— the European Environment

Agency,

— the European Training Foun-

dation,

— the European Monitoring
Centre for Drugs and Drug
Addiction,

(Council Decision taken on the basis
of Article 235 of the Treaty)

— the

European Medicines

Agency,

— the European Agency for
Health and Safety at Work,

— the Office for Harmonisa-
tion in the Internal Market
(Trademarks and Designs),

— the European Police Office
(Europol) and the Europol
Drugs Unit.

The bodies set up by the Council
other than the above may use the
Centre’s services. The institutions
and bodies of the European Union
which already have their own
Translation Services may, if need
be, call upon the Centre’s services
on a voluntary basis. The Centre
plays a full part in the work of the
Interinstitutional
Translation
Committee.

Source:

Information supplied by the Centre.

— to make arrangements for
cooperation with the bod-
ies and institutions,

— to participate in the work
the Interinstitutional

of
Translation Committee.

Composition

27,9 million euro (29,8 million euro)

505 438 (377 999)

— one

representative per

Member State,

— two representatives from

Staff as at 31 December 181 (181)
posts listed in the establishment
plan

the Commission,

posts occupied: 163 (150)

Number of pages by languages

— official

languages: 501 475

(373 270)

— other

languages:

3 963

+ 12 (15) other posts

(4 729)

Total staff: 175 (165)

Assigned to:

— operational duties: 114 (119)

— administrative duties: 57 (52)

— mixed duties: 4(4)

Number of pages per customer

— bodies: 496 665 (366 055)

— institutions: 8 773 (11 944)

Number
freelance: 226 822 (146 342)

pages

of

translated

— one representative from
each body or institution
calling upon the Centre’s
services.

Task

the Centre’s annual
Adopts
work programme and annual
report.

2. Director

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

3. External audit

Court of Auditors.

4. Internal audit

Commission’s internal auditor.

5. Discharge authority

Parliament on a recommenda-
tion from the Council.

O

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TRANSLATION CENTRE FOR THE BODIES OF THE EUROPEAN UNION

Table 2

Implementation of the budget for the financial year 2005

(1 000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered
in the final budget
for the financial
year

Revenue
received

Allocation of expenditure

Final budget appropriations

Appropriations carried over
from the previous financial
year

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

entered

com-
mitted

paid

carried
over

cancelled available

paid

cancelled available

com-
mitted

paid

carried
over

cancelled

Own revenue

24 166

30 356

Title I
Staff

14 117 13 410 13 305

106

707

122

100

22

14 239 13 532 13 404

106

729

Other revenue

Interest

Balance for the previ-
ous financial year

Total

0

300

3 497

27 963

94

428

Title II
Administration

Title III
Operating activities

Title X
Reserve

0

30 879

Table 3

4 235

3 112

2 358

755

1 123

642

583

59

4 877

3 754

2 941

755

1 181

7 645

7 309

6 018

1 291

336

990

987

1 966

0

0

0

1 966

0

0

2

0

8 634

8 298

7 005

1 291

338

1 966

0

0

0

1 966

Total 27 963 23 831 21 681

2 152

4 132

1 754

1 670

83

29 716 25 584 23 350

2 152

4 214

Table 4

Revenue and expenditure account for the financial years 2005 and 2004

Balance sheet at 31 December 2005 and 2004

Operating revenue
Community subsidies
Other subsidies/revenue

Operating expenditure
Staff
Administration
Operating activities
Provisions

Other income (d)
Other charges (e)

Total (a)

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

Economic result (f = c + d + e)

(1 000 euro)

2005

2004

0
30 780
30 780

13 200
3 547
7 397
1 849
25 993
4 787
429
– 4
5 212

0
23 573
23 573

11 929
2 734
5 919
1 410
21 992
1 581
2 618
– 7
4 192

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

Assets
Fixed Assets
Stock
Receivables
Cash accounts

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

(1 000 euro)

2005

2004

699
279
6 184
27 392
34 554

18 594
5 212
9 330
1 418
34 554

Total

Total

895
0
6 368
19 903
27 166

14 403
4 192
7 481
1 090
27 166

C
3
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5
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1
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.

19.12.2006

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Official Journal of the European Union

C 312/53

THE CENTRE’S REPLIES

The lack of regularity in requests for translation, together
7.
with a marked increase in the field of Community trade marks,
created a climate of instability throughout 2005, forcing the Cen-
tre to postpone a number of projects provided for under Title 2.

8.
The Centre will take the Court’s observation into account
when migrating from SI2 to ABAC (this migration is scheduled
for 2007) to establish new financial circuits.

The Centre will ask the Interinstitutional Committee for
9.
Translation and Interpretation to resolve the issue of ownership
of the IATE database.

10.
At its meeting of 22 March 2006, the Management Board
of the Centre adopted an opinion in which it reiterated that it was
‘well aware of the importance of settling this matter once and for all
and calls on the European Commission to agree, together with the Cen-
tre, to an arbitration procedure in order to reach a settlement’. The Cen-
tre will keep the Court apprised of any developments in this
matter.