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

19.12.2007

EN

Official Journal of the European Union

C 309/99

on the annual accounts of the European Centre for Disease Prevention
and Control for the financial year 2006 together with the Centre’s replies

REPORT

(2007/C 309/17)

CONTENTS

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

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

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

Paragraph

1-2

3-6

7-11

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

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

Page

100

100

100

102

104

C 309/100

EN

Official Journal of the European Union

19.12.2007

INTRODUCTION

The Court has thus obtained a reasonable basis for the

6.
Statement set out below.

1.
The European Centre for Disease Prevention and Control
(hereinafter referred to as ‘the Centre’) was set up by Regulation
(EC) No 851/2004 of the European Parliament and of the Coun-
cil of 21 April 2004 (1). Its main tasks are to collect and dissemi-
nate data on the prevention and control of human diseases and
to provide scientific opinions on this subject. It is also required to
coordinate the European network of bodies operating in this field.

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.

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

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.

7.
Nearly 45 % of the commitments entered into during the
year were carried over. Moreover, during the second half of 2006,
numerous transfers were made, due mainly to imprecise estimates
of staffing needs (4). These transfers were made without the Cen-
tre’s Governing Board having been informed in due time. Thus,
the budgetary principles of annuality and specification were not
strictly observed.

4.
The Centre’s accounts for the financial year ended
31 December 2006 (3) 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.

Legal commitments (5) were entered into in the absence of
the financial

8.
prior budgetary commitments,
regulation.

in breach of

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.

9.
During the year, pre-financing items were booked as bud-
get expenditure, and not as advance payments. No procedure
existed to highlight these items. At the year-end, during the
closure-of-accounts procedure, the accounting officer searched
manually for any outstanding pre-financing items. This led to an
increased risk of errors (6) in the derivation of the amount.

(1) OJ L 142, 30.4.2004, p. 1.
(2) OJ L 248, 16.9.2002, p. 1.
(3) These accounts were drawn up on 12 June 2007 and received by the

Court on 2 July 2007.

(4) Appropriations under Title I reduced by 1,6 million euro.
(5) Three cases of an approximate total value 320 000 euro.
(6) One 40 000 euro error was detected and corrected during the audit.

19.12.2007

EN

Official Journal of the European Union

C 309/101

Rights of access to the computerised budget manage-
10.
ment system were not always consistent with the authorisations
granted by the Director. The accounting officer has not yet vali-
dated the main commitment and payment procedures.

The rules on procurement procedures are not strictly
11.
enforced. The following anomalies (1) were observed: lack of clear

selection criteria, incorrect choice of the procedure, non respect
of the procedure described in the tender notice and insufficient
documentation of the procedure.

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) Three cases of an approximate total value of 230 000 euro.

European Centre for Disease Prevention and Control (Stockholm)

Table 1

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 2006

A high level of human health
protection shall be ensured in
the definition and implemen-
all Community
tation of
policies and activities. Com-
munity action, which shall
complement national policies,
shall be directed towards
improving public health, pre-
venting human illness and dis-
eases, and obviating sources
of danger to human health.
Such action shall cover the
fight against the major health
scourges,
promoting
by
research into their causes,
their transmission and their
prevention, as well as health
information and education.

(Article 152 of the Treaty)

Objectives

Tasks

1. Management Board

2006 final budget

17,146 million euro,
Community subsidy of 98 %

including a

Staff numbers

Posts in the establishment plan: 50

posts occupied: 48

+ 36 other posts

Total staff: 84

assigned to the following duties:

— operational: 49

— administrative: 35

Strengthen Europe’s defences
infectious diseases;
against
specifically, to identify, assess
and communicate current
and emerging threats
to
human health from commu-
nicable diseases.

Therefore the Centre shall
operate dedicated surveil-
lance networks, provide sci-
entific opinions, operate the
early warning and response
system (EWRS) and provide
scientific and technical assis-
tance and training.

and

— Operate dedicated dis-
surveillance net-
ease
enhance
works
networking
activities.
The Centre has a specific
role in data collection,
validation, analysis and
dissemination.

— Provide

authoritative
expert advice and scien-
tific opinions and studies
on communicable dis-
eases.

— Operate

EWRS.
the
Develop procedures for
identifying
emerging
health threats.

— Strengthen

Member
States’ capacity in pre-
paredness planning and
in training.

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

One member designated by each
Member State, two members desig-
nated by the European Parliament and
three representatives of the Commis-
sion.

The Board adopts the Centre’s annual
programme and budget and monitors
their implementation.

2. Director

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

3. Advisory Forum

A representative of each Member
State and three non-voting represen-
tatives of the Commission.

The Forum is to assure the scientific
excellence of the work and the inde-
pendence of the activities and opin-
ions of the Centre.

4. External Audit

Court of Auditors.

5. Discharge authority

Parliament on a recommendation
from the Council.

— Several guidelines, recommenda-
tions and risk assessments were
produced, many focusing on
influenza.

— Evaluation and assessment of
some surveillance networks.

— Development of the database for
routine surveillance with a core
set of variables for all diseases set
out for surveillance at European
level
(Commission Decisions
2002/253/EC and 2003/534/EC).

— Epidemiological information from
ECDC published in weekly elec-
tronic journal.

— In application of EC Regulation
No 851/2004 and following an
agreement between the ECDC and
DG SANCO, the takeover of the
EWRS by ECDC was organised.

— The EPIET field epidemiological
training programme, initiated by
the Commission, has been taken
over by ECDC.

Source:

Information supplied by the Centre.

C
3
0
9
/
1
0
2

E
N

O

f
f
i
c
i
a
l

J
o
u
r
n
a
l

o
f

t
h
e

E
u
r
o
p
e
a
n
U
n
o
n

i

.

1
9
1
2
2
0
0
7

.

European Centre for Disease Prevention and Control (Stockholm) — Implementation of the budget for the financial year 2006

Table 2

Revenue

Revenue entered
in the final budget for
the financial year

Revenue received

Allocation of expenditure

Expenditure

Final budget appropriations

Appropriations carried over from previous
financial year(s)

entered

committed

paid

carried
over

cancelled

entered

committed

paid

cancelled

(1 000 euro)

Source of revenue

Community
subsidies (1)

17 146

17 018

Title I
Staff

Title II
Administration

Title III
Operating activities

6 084

6 068

5 664

404

16

3 731

3 588

1 968

1 620

143

7 331

7 216

Total

17 146

16 872

2 143

9 775

5 073

7 097

115

274

362

535

541

1 438

362

535

312

50

402

133

541

1 438

408

1 122

133

316

Total

17 146

17 018

(1) Including the appropriations managed by the Commission.
NB: Variations in totals are due to the effects of rounding.
Source: Data supplied by the Centre. This table summarises the data supplied by the Centre in its own financial statements. Revenue collected and payments are estimated on a cash basis.

European centre for disease prevention and control (Stockholm) — Economic outturn
account for the financial years 2006 and 2005

European centre for disease prevention and control (Stockholm) — Balance sheet at
31 December 2006 and 2005

Table 3

Table 4

(1 000 euro)

2006

2005

(1 000 euro)

2006

2005

Operating revenue

Community subsidies

Operating expenditure

Staff expenditure

Fixed asset-related expenditure

Other administrative expenditure

Operational expenditure

15 806

Total (a)

15 806

4 536

305

2 893

2 623

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

5 449

Total (b)

10 357

Financial operations revenue (e)

Financial operations expenditure (f)

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

64

– 64

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

5 385

Non-current assets
Intangible assets
Tangible fixed assets
Current assets
Short-term prefinancing
Stocks
Short-term receivables
Cash and cash equivalents

Current liabilities
Provision for risks and charges
Accounts payable

Net assets
Accumulated surplus/deficit
Economic result for the year

2 646

2 646

170

107

1 079

326

1 682

964

0

11

– 11

954

111
936

400
7
387
7 223
9 064

70
2 655
2 725

954
5 385
6 339
9 064

37
207

320
2 059
2 624

1 671
1 671

954
954
2 624

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.

.

1
9
1
2
2
0
0
7

.

E
N

O

f
f
i
c
i
a
l

J
o
u
r
n
a
l

o
f

t
h
e

E
u
r
o
p
e
a
n
U
n
o
n

i

C
3
0
9
/
1
0
3

C 309/104

EN

Official Journal of the European Union

19.12.2007

THE CENTRE’S REPLIES

The year 2006 was the first full year of operation of the
7.
Centre. The unpredictability of certain developments, especially in
recruitment, resulted in required budget transfers. Planning and
monitoring of workplans and budgets is getting strong manage-
ment attention in 2007 to limit the appropriations that are car-
ried over.

The Management Board was informed on the transfers executed
by the Director at its meeting of 12-13 December 2006. It will be
kept up to date on a continuous basis through an extranet.

8.
Internal capacities have been established and measures
were taken as to address the identified weaknesses as well as to
improve the internal control systems (e.g. internal procedures,
new workflows, training of staff).

9.
that

The Centre agrees with the observation of the Court and
the
the manual detection of prefinancing increases

possibility of errors. Since the beginning of 2007, all prefinanc-
ing are directly booked as advance payment.

10.
The Centre has appointed a financial systems (SI2) secu-
rity officer. In early 2007 the Centre has reassessed its financial
circuits and new workflows were approved by the Director in
May 2007. Following this consolidation phase the accountant
will proceed with the evaluation and subsequent validation of the
systems as required by the Financial Regulation.

11.
The referred anomalies relate to the first full year of
operation and since then substantial progress has been made in
strengthening the financial/procurement area (e.g. financial offic-
ers in the operational units, internal audit capability being set up,
financial circuits reassessed, financial procedures adopted, train-
ing of staff, review contracts).