Report on the annual accounts of the European Centre for the Development of Vocational Training for the financial year 2006 together with the Centre's replies
Date: 2007-09-27
Institutions: European Court of Auditors
Subjects: Cedefop, European Court of Auditors, administration of the Institutions, financial control, implementation of the budget, powers of the institutions (EU), report

C 309/86

EN

Official Journal of the European Union

19.12.2007

REPORT

on the annual accounts of the European Centre for the Development of
Vocational Training for the financial year 2006 together with the Centre’s
replies

(2007/C 309/15)

CONTENTS

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

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

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

1-2

3-6

7-13

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

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

87

87

87

89

93

Paragraph

Page

19.12.2007

EN

Official Journal of the European Union

C 309/87

INTRODUCTION

The Court has thus obtained a reasonable basis for the fol-

6.
lowing Statement set out below:

1.
The European Centre for the Development of Vocational
Training (hereinafter ‘the Centre’) was established by Council
Regulation (EEC) No 337/75 (1). Its core mandate is to serve the
development of vocational training at Community level. In order
to achieve this objective, it has the task of compiling and dissemi-
nating documentation on vocational training systems.

Reliability of the accounts

The Centre’s accounts for the financial year ended 31 Decem-
ber 2006 are, in all material respects, reliable.

Legality and regularity of the underlying transactions

2.
Table 1. summarises the Centre’s competences and activi-
ties. Key data summarised from the financial statements drawn up
by the Centre for the financial year 2006 is presented in Tables 2,
3 and 4 for information purposes.

Except for the situation described in paragraph 13, the trans-
actions underlying the Centre’s annual accounts, taken as a
whole, are legal and regular.

STATEMENT OF ASSURANCE

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 2006 (3) were drawn up by its Director, pursuant
to Article 12 (a) of Regulation (EEC) No 337/75, and sent to the
Court, which is required to provide a statement as to their reli-
ability and the legality and regularity of
the underlying
transactions.

OBSERVATIONS

7.
For the 2006 administrative expenditure budget (Title II),
more than 43 % of the commitments made were carried over to
the following financial year. For operating activities (differentiated
appropriations under Title III), more than 20 % of the payment
appropriations were cancelled. The Court observed a high num-
ber of budget transfers, a large amount transferred from Title I
(staff expenditure) to Title III (operating activities) as well as a con-
centration of transfers at the year end. The budgetary principle of
specification was not strictly observed.

8.
The Centre has neither defined nor documented an inven-
tory procedure for identifying, registering and capitalising assets
in a correct and exhaustive manner.

9.
Despite the progress made in 2006, the documentation of
the main procedures including the internal control processes was
not complete.

5.
The court conducted its audit in accordance with the IFAC
and INTOSAI International Auditing Standards and Codes of Eth-
ics, insofar as these are applicable in the European Community
context. The audit was planned and performed to obtain reason-
able assurance that the accounts are reliable and that the under-
lying transactions are legal and regular.

(1) OJ L 39, 13.2.1975, p. 1.
(2) OJ L 248, 16.9.2002, p. 1.
(3) These accounts were drawn up on 17 March 2007 and received by the

Court 14 June 2007.

10.
The Centre reimbursed in their entirety all school fees
paid for the children of some agents. There was no legal basis for
these refunds.

11.
In two cases, the Centre did not check correctly the nec-
essary professional experience required by the vacancy notice
during the pre-selection phase and thus had to reject the success-
ful candidates after the formal job proposal. There was a lack of
effective control on whether the documents submitted by candi-
dates in support of their professional experience offer genuine
proof in order to avoid unnecessary costs and legal risks.

C 309/88

EN

Official Journal of the European Union

19.12.2007

In one procurement procedure (1), the complexity of the
12.
system of evaluation of the bids and the absence of clear and
complete information on the award criteria and their respective
weights led to a situation of non-transparency for the bidders. For
a framework contract (2), the Centre did not publish in either the
contract notice or the tender documents sufficient information
about the estimated global market value. An IT maintenance ser-
vice contract (3) signed in December 2003 by an unauthorised

person remained in force until the end of 2006 despite its impre-
cisions about the quantity and price of the services to be provided.

In its 2005 Statement of Assurance (4) the Court empha-
13.
sised the absence of a legal basis for a decision of the Centre’s Appeal
Committee by granting to an agent a compensation for non-
pecuniary harm not provided for in the Staff Regulations. Despite
the Court’s observation, that compensation (5) was paid in 2006.

This report was adopted by the Court of Auditors in Luxembourg at
27 September 2007.

its meeting of

For the Court of Auditors
Hubert WEBER
President

(1) Approximate annual value: 125 000 euro.
(2) Approximate annual value: 80 000 euro.
(3) Approximate annual value: 15 000 euro.

(4) OJ C 312, 19.12.2006, p. 61.
(5) Amount: 3 000 euro.

European Centre for the Development of Vocational Training (Cedefop) — Thessaloniki

Table 1

Area of Community competence
deriving from the Treaty

Competence of the Centre as specified in Articles 2 and 3 of Council Regulation
(EEC) No 337/75 of 10 February 1975 as last amended by Council Regulation
(EC) No 2051/2004 of 25 October 2004

Governance
Council Regulation (EEC) No 337/75
of 10 February 1975 as last amended
by Council Regulation (EC) No 2051/2004
of 25 October 2004

Resources made available
to the Centre in 2006
(2005)

Products and services supplied in 2006
(2005)

The Community implements a
vocational training policy to sup-
port and supplement the action of
the Member States as regards the
content and organisation of voca-
tional training.

Action aims to:

— facilitate

adaptation

to
industrial changes,
in par-
ticular through vocational
training and retraining;

— improve initial and continu-
ing vocational training in
order to facilitate vocational
integration and reintegra-
tion into the labour market;

— facilitate access

to voca-
tional training and encour-
age mobility of instructors
and trainees and particularly
young people;

— stimulate cooperation on
training between educa-
tional or training establish-
ments and firms;

— develop exchanges of infor-
mation and experience on
issues common to the train-
ing systems of the Member
States.

(From Article 150 of the Treaty)

The Centre’s mandate

Tasks

Governing Board (GB), consisting
of:

Budget

In its capacity as a European Union
reference centre for vocational
training and education, Cedefop
provides political decision-makers,
researchers and professionals with
information aimed at developing a
clearer understanding of current
trends that will thus enable them
to reach more soundly based deci-
sions with a view to future action.

— To compile selected docu-
mentation and produce data
analysis;

— To contribute to research
development and coordina-
tion;

— To utilise and disseminate
relevant information;

Cedefop assists
the European
Commission in promoting and
developing vocational training and
education at Community level.

— To encourage and support a
concerted approach to mat-
ters relating to the develop-
ment of vocational training;

— To provide a forum for a

broad and diverse public.

17,6 (17,1) million euro

Community contribution: 95 %
(96 %)

Staff numbers at 31 Decem-
ber 2006

Number of posts in establishment
plan: 95 (91)

Posts occupied: 81 (85)

Other staff: (contract staff and sec-
onded national experts): 42 (38).

Total staff: 123 (123)

assigned to the following duties:

operational: 84 (85)

administrative: 34 (33)

mixed: 5 (5)

For each Member State:

— one member representing the

Government;

— one member representing the
employers’ organisations;

— one member representing the
and
employees’ organisations
three members representing the
European Commission.

Bureau, made up of:

The chairman and the three vice-
chairmen of the GB (one from each of
the groups), one coordinator per group
and one representative of the Commis-
sion.

Director

Appointed by the Commission from a
list of candidates submitted by the Gov-
erning Board;
is responsible for the
management of the Centre and imple-
ments the decisions of the Governing
Board and the Bureau.

Internal control

Commission’s Internal Audit Service.

Internal Auditor of the Centre (as of
16 December 2006).

External audit

European Court of Auditors.

Discharge

Parliament, on the Council’s recom-
mendation.

Cedefop’s report to the ministerial conference in Hel-
sinki, assessing progress in achieving the Copenhagen-
Maastricht objectives
enhancement of
for
European cooperation in vocational education and
training (VET). Cedefop prepared the background
document for the Helsinki communiqué.

the

The 4th research report, focussing on modernisation
of VET, was prepared. It comprises research findings
on reform, innovation of VET, social cohesion, and
skill demand.

An Agora conference and publication on older work-
ers and lifelong learning provided a comprehensive
view on an increasingly important issue.

In regard to the identification of skill needs Cedefop
concentrated 2006 on methods for the forecasting of
skill needs in preparation of a medium term skill needs
forecast for all Member States. The European Journal
of vocational education (3 issues were published, as in
2005) improved in scientific quality and contributes
to the quality of research in VET.

Contribution to clusters and working groups of the EC
under the Education and Training 2010 program on
learning outcomes and validation of non-formal learn-
ing, quality assurance, lifelong guidance, teachers and
trainers, the European qualifications framework and
the European Credit transfer system. Like Europass,
these are examples of European approaches and
instruments to create a European area of VET. Euro-
pass (Cedefop provides major input and cooperates
with EC) is a successful initiative which is used and
accepted by a rapidly increasing number of European
citizens. By the end of 2006 over a million CV tem-
plates had been downloaded and almost one million
CVs have been generated on line.

.

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Area of Community competence
deriving from the Treaty

Competence of the Centre as specified in Articles 2 and 3 of Council Regulation
(EEC) No 337/75 of 10 February 1975 as last amended by Council Regulation
(EC) No 2051/2004 of 25 October 2004

Governance
Council Regulation (EEC) No 337/75
of 10 February 1975 as last amended
by Council Regulation (EC) No 2051/2004
of 25 October 2004

Resources made available
to the Centre in 2006
(2005)

Products and services supplied in 2006
(2005)

The Leonardo Da Vinci study visits programme, the
cooperation with social partners
and sectoral
approaches to VET are other examples of Cedefop’s
contribution to the development of VET in the EU.

Besides continuation of close co-operation with the
European Training Foundation in the familiarisation
of acceding/candidate countries and beyond, Cedefop
has entered into a formal co-operation with the Foun-
dation on living and working conditions to strengthen
synergies.

A revamped website, increased work with the press
and continued activities of documentation (ISO certi-
fied) and publication — online and in hard copy —
have helped to raise the visibility of Cedefop and
awareness of VET issues.

Some data: 24 conferences and seminars, 24 work
shops, and 21 presentations/visits to Cedefop were
organised in 2006; 43 (60) publications were pub-
lished, the number of registered users of the electronic
training village (ETV) increased to 64 828 (60 440)
and work proceeded on 36 projects (29 projects). Study
visits: 844 (762) participants.

Source:

Information supplied by the Centre.

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European Centre for the Development of Vocational Training (Cedefop) — Thessaloniki — Implementation of the budget for the financial year 2006

Table 2

Revenue

Revenue entered in
the final budget for
the financial year

Revenue collected

Allocation of expenditure

Appropriations for the financial year

Appropriations carried over from the previous financial year

entered

committed

paid

carried
over

cancelled

available

committed

paid

carried
over

cancelled

Expenditure

(1 000 euro)

Source of revenue

Own revenue

Community sub-
sidy

16 700

14 589

Title I
Staff (NDA)

Title II
Administration (NDA)

Title III
Operating activities (DA)

9 443

8 483

8 145

338

960

213

213

1 419

1 281

738

559

123

334

334

Other revenue

140

75

Assigned revenue

723

649

Assigned revenue

Total

17 563

15 313

— CA

— PA

5 978

5 978

723

5 722

0

387

Total CA

17 563

15 872

0

4 527

65

0

Total PA

17 563

0

13 475

0

0

256

1 451

0

0

584

1 480

1 480

74

511

1 413

1 058

2 607

1 058

0

0

337

884

0

NDA: non-differentiated appropriations (commitment appropriations equal payment appropriations).
DA:
CA:
PA:
Source: Data supplied by the Centre. This table summarises data provided by the Centre in its Annual Accounts. Revenue collected and payments are estimated on a cash basis.

differentiated appropriations (commitment appropriations may differ from payment appropriations).
commitment appropriations in the context of differentiated appropriations.
payment appropriations in the context of differentiated appropriations.

173

297

0

0

179

0

649

0

0

0

0

333

333

333

40

38

0

0

0

77

77

.

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C 309/92

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Official Journal of the European Union

19.12.2007

European Centre for the Development of Vocational Training (Cedefop) — Thessaloniki — Economic outturn
account for the financial years 2006 and 2005

Table 3

Operating revenue

Community subsidies

Other subsidies

Other revenues

Operating expenditure

Staff expenditure

Fixed asset related expenditure

Other administrative expenditure

Operational expenditure

(1 000 euro)

2006

2005

14 146

14 620

457

279

399

291

Total (a)

14 882

15 309

8 166

480

1 181

4 340

Total (b)

14 167

9 091

502

1 460

5 021

16 074

– 765

1

4

– 3

– 768

Surplus/(deficit) from operating activities (c = a – b)

Financial operations revenue (e)

Financial operations expenditure (f)

Surplus/(deficit) from non-operating activities (g = e – f)

Economic result for the year (h = c + g)

715

0

4

– 4

711

European Centre for the Development of Vocational Training (Cedefop) — Thessaloniki — Balance sheet
at 31 December 2006 and 2005

Table 4

Non-current assets

Intangible fixed assets

Tangible fixed assets

Current assets

Short-term pre-financing

Short-term receivables

Cash and cash equivalents

Current liabilities

Provisions for risks and charges

Accounts payable

Net assets

Accumulated surplus/deficit

Economic result of the year

(1 000 euro)

2006

2005

92

4 887

552

443

3 919

9 893

317

3 777

4 094

5 088

711

5 799

9 893

136

5 218

80

294

3 344

9 072

204

3 780

3 984

5 856

– 768

5 088

9 072

Total assets

Total liabilities

Total net assets

Total liabilities and net assets

Source: Data supplied by the Centre — This table summarises the data provided by the Centre in its annual accounts: these accounts are drawn

up on an accrual basis.

19.12.2007

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Official Journal of the European Union

C 309/93

THE CENTRE’S REPLIES

Further attempts to improve the planning and monitoring
7.
of the Centre’s budget implementation and budgeting have been
undertaken and will be reinforced. This will allow for fewer trans-
fers and increase the specificity of the budget.

Although the situation as described by the Court did not
8.
affect the reliability of the Centre’s financial statements, the Cen-
tre has started to further develop and document a reliable inven-
tory management system with clearly defined responsibilities.
This will be implemented by the end of 2007 and specific train-
ing is foreseen in December 2007 for all agents involved.

9.
In 2006, the Centre made major progress in the most sen-
sitive areas. However, despite its considerable efforts, the Centre
could not complete the documentation of its procedures, partly
because the recruitment of an internal auditor could only be con-
cluded in December 2006. The Centre continues with its efforts
to have complete documentation by the first half of 2008.

10.
The reimbursement, even though based on a 1997 deci-
sion which had not been prolonged, has been motivated by the
high fees of English speaking schools and the absence of a Euro-
pean school in Thessaloniki. The measure resulted in extra costs
of 2 900 euro per child and year (for the school year 2006/2007
two employees with altogether four children benefited from this
measure.) The Centre has realised the mistake and published in
July 2007 an administrative note to all staff confirming the rel-
evant provisions of the Staff Regulation.

Moreover, the Centre promotes the establishment of a European
schooling facility in Thessaloniki to be organised by the compe-
tent Greek authorities.

On 29 January 2007 an internal guide for selection
11.
boards was published. It provides, amongst others, clear guide-
lines for the calculation of professional experience. Moreover
checks at the pre-selection stage and before issuing the formal job
offers have been reinforced.

12.

(1) Since July 2007 and in reaction to the Courts finding the
Centre has made an effort to assure that weightings of sub-
criteria are published in the tender documents.

(2) The procedure for the framework contract was launched in
October 2005 (and the contract was signed in March 2006).
Since January 2007 the Centre provides for each acquisition
systematically information on its market volume in the ten-
der documents.

(3) The current directorate had not been aware of the issue. In
consequence,
the IT contract mentioned has not been
renewed in 2007. A new open procurement had been
launched and concluded in February 2007.

The decision of which the legality is contested by the
13.
Court, is conform to the rules adopted by the Governing Board
of the Centre. The Centre has asked for an opinion of the Legal
Service of the Commission in response to the 2005 statement of
the Court. The opinion of the Legal Service of the Commission
fully confirmed the legality of the decision of the Appeals Com-
mittee and has been transmitted to the Court. Following the
renewed observation of the Court, the Centre will consult the Col-
lege of the Heads of Administration.