Report on the annual accounts of the European Maritime Safety Agency for the financial year 2006 together with the Agency's replies
Date: 2007-09-27
Institutions: European Court of Auditors
Subjects: European Court of Auditors, European Maritime Safety Agency, 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 309/55

on the annual accounts of the European Maritime Safety Agency for the
financial year 2006 together with the Agency’s replies

REPORT

(2007/C 309/10)

CONTENTS

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

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

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

1-2

3-6

7-10

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

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

56

56

56

58

61

Paragraph

Page

C 309/56

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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 Maritime Safety Agency (hereinafter called
‘the Agency’) was set up by Regulation (EC) No 1406/2002 of the
European Parliament and of the Council of 27 June 2002 (1). The
Agency’s tasks are to ensure a high level of maritime safety and
prevention of pollution by ships, to provide the Commission and
the Member States with technical assistance, to monitor the
implementation of Community legislation and to evaluate its
effectiveness.

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

Reliability of the accounts

The Agency’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 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

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 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.

More than 43 % of the payment appropriations had to be
7.
cancelled at the end of the year 2006. In addition, there was a
concentration of transactions during the last quarter of the year.
Thus, the budgetary principle of accuracy was not strictly
observed.

4.
The Agency’s accounts for the financial year ended
31 December 2006 (3) were drawn up by its Executive Director,
pursuant to Article 18 of Regulation (EC) No 1406/2002, and
sent to the Court, which is required to give a Statement of Assur-
ance as to their reliability and the legality and regularity of the
underlying transactions.

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 208, 5.8.2002, p. 1.
(2) OJ L 248, 16.9.2002, p. 1.
(3) These accounts were drawn up on 13 June 2007 and received by the

Court 27 June 2007.

8.
The procedures for establishing the budget and the estab-
lishment plan were not sufficiently rigorous. This led to a high
number of budgetary transfers (4), inadequate planning of staff
recruitment (5) and incorrect budget presentation (6).

Legal commitments were entered into before the corre-
9.
sponding budgetary commitments (7). Some contracts allowed
for 100 % prefinancing: this practice is not in line with the prin-
ciples of sound financial management (8).

(4) More than 35 transfers of appropriations in 2006.
(5) Failure to meet recruitment objectives resulted in a transfer which

decreased budget line 1 100 (salaries) by 1,2 million euro.

(6) The budget is supposed to show a summary statement of the sched-
ule of payments due in subsequent financial years to meet budget
commitments entered into in earlier financial years (article 31, 2(c) of
the Agency’s financial regulation).

(7) Four cases of a total approximate value of 345 000 euro.
(8) Article 67 of Financial Regulation,

(Regulation (EC, Euratom)

no 2343/2002 of the Commission of 23 December 2002).

19.12.2007

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Official Journal of the European Union

C 309/57

The inventory system is weak. The records do not allow
10.
all goods to be physically traced. Computer equipment is not
recorded in the system.

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

Table 1

European Maritime Safety Agency (Lisbon)

Areas of Community competence
deriving from the Treaty

Competences of the Agency as defined in Regulation (EC) No 1406/2002 of the European Parliament
and of the Council of 27 June 2002 as amended by Regulations (EC) No. 1644/2003 of 22 July 2003
and No. 724/2004 of 31 March 2004

Governance

Resources made available to the
Agency 2006
(Data for 2005)

Common transport policy

Objectives

Tasks

1. Administrative Board

Final Budget for 2006:

— To assist the Commission in drawing up Com-

Composition

‘The Council may, acting by a quali-
fied majority, decide whether, to
what extent and by what procedure
appropriate provisions may be laid
down for sea and air transport.’

(Article 80 of the Treaty)

— To ensure a high, uniform
and effective level of mari-
time safety and prevention
of pollution by ships.

— To provide the Member
States and the Commission
with technical and scientific
assistance.

— To monitor the implemen-
tation of Community legis-
lation in this field and to
evaluate the effectiveness of
the measures in place.

— To introduce operational
methods for combating pol-
lution in European waters.

Source:

Information supplied by the Agency

munity legislation and in its implementation;

— To monitor the overall functioning of the Com-
munity port State control regime, which may
include visits to the Member States.

— To provide the Commission with technical assis-
tance for the port State control of ships.

— To work with the Member States on developing
technical solutions and to provide technical assis-
tance related to the implementation of Commu-
nity legislation.

— To promote cooperation between riparian States

in the shipping areas concerned.

— To develop and operate any information system

necessary.

— To facilitate cooperation between the Member
States and the Commission in the development
of a common methodology for investigating
maritime accidents.

— To provide the Commission and the Member
States with reliable information on maritime
safety and on pollution by ships.

— To assist the Commission and the Member States
in the identification and pursuit of ships making
unlawful discharges.

— To monitor the classification societies recognised
by the EU and to issue the corresponding reports
to the Commission.

— To assist the Commission with the input for and
implementation of tasks relating to the Directive
on marine equipment.

— To provide the Commission with data on the
introduction of the Directive on ship waste recep-
tion facilities in European ports.

One representative per Member
State, four representatives of the
Commission, four representatives,
without the right to vote, from the
professional sectors concerned.

Tasks

44,7 million euro (35,3) Commu-
nity contribution: 100 % (100%)

Total Staff
ber 2006:

at 31 Decem-

132 (95) posts in the establish-
ment plan

Number of posts occupied:

— To adopt the budget and the

work programme.

111 (80)

20 (20) other posts (auxiliary con-
tracts, seconded national experts,
local staff, employment-agency
staff)

Total staff numbers: 131 (100)

assigned to the following duties:

— operational tasks: 83 (65)

— administrative and support

tasks: 41 (27)

— mixed tasks: 7 (8)

— To examine requests from
Member State for assistance.

2. Executive Director

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

3. External audit

Court of Auditors.

4. Discharge Authority

Parliament on a recommendation
from the Council.

Products and services supplied 2006

Number of specifications and guide-
line documents: 49 (includes reports
and/or studies)

Inspections/Audits: 47 (over 600
mission-man days)

Exercises at sea (Operational Activi-
ties): 7

Seminars, trainings & workshops: 59
(102 days and 1 440 participants)

C
3
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European Maritime Safety Agency (Lisbon) — Implementation of the budget for the financial year 2006

Table 2

Origin of revenue

Revenue

Revenue entered
in the final budget for
the financial year

Revenue received

Allocation of expenditure

Expenditure

Final budget appropriations for the financial year

Appropriations carried over from
the previous Financial Year

entered

committed

paid

carried
over

cancelled

entered

paid

cancelled

(1 000 euro)

Community subsidies

44 738

32 030

Other income

0

362

Total

44 738

32 392

Title I
Staff (NDA)

Title II
Administration (NDA)

Title III
Operating activities (DA)

13 459

12 705

10 387

664

2 408

161

62

2 972

2 550

1 944

606

422

333

248

— CA

28 308

19 033

0

— PA

28 308

0

11 638

Total CA

44 738

34 287

0

Total PA

44 738

0

23 969

0

0

1 270

1 270

9 275

16 669

12 105

19 499

0

0

0

0

0

0

494

310

184

99

85

0

0

0

NDA: non differentiated appropriations (commitment appropriations equal payment appropriations).
DA:
CA:
CP:
Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts. Revenue collected and payments are estimated on a cash basis.

differentiated appropriations (commitment and payment appropriations may differ).
commitment appropriations in a system of differentiated appropriations.
payment appropriations in a system of differentiated appropriations.

.

1
9
1
2
2
0
0
7

.

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3
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5
9

C 309/60

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Official Journal of the European Union

19.12.2007

European Maritime Safety Agency (Lisbon) — Economic outturnn account for the financial years 2006
and 2005

Table 3

(1 000 euro)

2006

2005

Operating revenue

Community subsidies

Other subsidies

Operating expenditure

Staff expenditure

Fixed asset related expenditure

Other administrative expenditure

Operational expenditure (1)

24 716

678

Total (a)

25 394

9 616

236

3 548

14 151

27 551

Total (b)

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

– 2 157

Financial operations revenue (e)

Financial operations expenditure (f)

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

0

0

0

(1) Signature of new contracts for tankers.

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

– 2 157

15 666

0

15 666

6 099

151

2 042

2 925

11 217

4 439

0

3

– 3

4 435

European Maritime Safety Agency (Lisbon) — 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 for the year

(1 000 euro)

2006

2005

55

523

4 849

270

11 633

17 330

191

12 111

12 301

7 185

– 2 157

5 028

17 330

69

455

5 351

105

8 866

14 847

107

7 555

7 661

2 750

4 435

7 185

14 847

Total assets

Total liabilities

Total net assets

Total liabilities and net assets

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

up on a accrual basis.

19.12.2007

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Official Journal of the European Union

C 309/61

THE AGENCY’S REPLIES

The budget in of the Agency was over 50 % devoted to
7.
‘antipollution measures’. In this area the Agency launched calls for
tender to conclude four contracts for pollution response vessels.
Towards the end of this process two companies decided at the last
moment to withdraw their bids so that only two contracts were
awarded. This resulted in a cancellation of substantial payment
appropriations at the end of the year.

8.
The re-location of the Agency in 2006 from Brussels
to Lisbon has had budgetary implications difficult to predict,

including the departure of almost 20 percent of staff under
contract.

9.
The procedures to avoid a posteriori commitments are
being strengthened. The conditions of prefinancing are revised
following the comment of the Court.

10.
The replacement from June 2007 of the old inventory
system by ABAC Assets will eliminate the problems mentioned
by the Court.