Report on the annual accounts of the European Union Fundamental Rights Agency (formerly the European Monitoring Centre on Racism and Xenophobia) for the financial year 2006 together with the Agency's replies
Date: 2007-09-27
Institutions: European Court of Auditors
Subjects: EU office or agency, European Court of Auditors, administration of the Institutions, financial control, fundamental rights, implementation of the budget, powers of the institutions (EU), report

C 309/6

EN

Official Journal of the European Union

19.12.2007

REPORT

on the annual accounts of the European Union Fundamental Rights
Agency (formerly the European Monitoring Centre on Racism
and Xenophobia) for the financial year 2006 together with the Agency’s
replies

(2007/C 309/02)

CONTENTS

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

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

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

1-2

3-6

7-10

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

7

7

7

9

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

12

Paragraph

Page

19.12.2007

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Official Journal of the European Union

C 309/7

INTRODUCTION

The Court has thus obtained a reasonable basis for the

6.
Statement set out below.

1.
The European Union Fundamental Rights Agency (for-
merly the European Monitoring Centre on Racism and Xeno-
phobia hereinafter the Agency) was established by Council
Regulation (EC) No 1035/97 of 2 June 1997 (1) and modified by
Council Regulation (EC) No 168/2007 of 15 February 2007 (2),
which extended its competencies. The Agency’s primary tasks are
to provide the Union and the Member States with reliable infor-
mation on racism, xenophobia and anti-semitism in the Union
and to cooperate with the Council of Europe in these areas.

Table 1 summarises the Agency’s competences and activi-
2.
ties. Key data summarised from the financial statements drawn up
by the Agency for the financial year 2006 is shown 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 (3); it was drawn up fol-
lowing an examination of the Agency’s accounts, as required by
Article 248 of the Treaty establishing the European Community.

7.
The Agency transferred 235 000 euro from the opera-
tional reserve (Title III) to Title I (staff expenditure) to cover
increased costs for temporary staff. The justification for this trans-
fer was not documented as required by article 23(3) of the Agen-
cy’s Financial Regulation.

4.
The Agency’s accounts for the financial year ended
31 December 2006 (4) were drawn up by its Director, pursuant
to Article 12 of Regulation (EC) No 1035/97, and sent to the
Court, which is required to provide a statement of assurance on
their reliability and on the legality and regularity of the underly-
ing transactions.

8.
In 2006, the Agency decided to bear in their entirety the
costs of providing schooling for its staff’s children without apply-
ing Article 3 of Annex VII to the Staff Regulations. Payments were
made in 2006 although the decision had not been adopted by the
Management Board and no formal agreements had been signed
with suitable local schools (5).

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 151, 10.6.1997, p. 6.
(2) OJ L 53, 22.2.2007, p. 1.
(3) OJ L 248, 16.9.2002, p. 1.
(4) These accounts were drawn up on 11 May 2007 and received by the

Court on 1 July 2007.

9.
In May 2006, the Director approved procedures govern-
ing the recruitment of staff for the Agency. On several points,
these procedures were not in line with the rules and objectives of
the Staff Regulations: non respect of the principle of parity in the
composition of the selection board; establishment of the reserve
list in alphabetical order; no effective possibility to appeal given
to rejected candidates during the preliminary evaluation phase.

(5) Amount of school fees (school year 2006/2007) accepted for reim-

bursement in 2006: 31 340 euro.

C 309/8

EN

Official Journal of the European Union

19.12.2007

In one procurement procedure for a framework con-
10.
tract (1), the Agency received two tenders. One was rejected by the
opening committee on the basis that its reception was late

whereas it was not. The contract was awarded to the second ten-
der received, even though it obtained a very low score for the
quality evaluation.

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) Estimated value for 4 years: 400 000 euro.

Table 1

European Union Fundamental Rights Agency (Vienna)

Areas of Community
competence deriving from
the Treaty

Competences of the Agency as specified in Council Regulation (EC)
No 1035/97 of 2 June 1997

Gouvernance

Resources made available t
o the Centre in 2006
(2005)

Products and services supplied
during the financial year 2006

Collection of information

Objectives

Tasks

1. Management Board

Final budget:

Raxen:

The
Commission may,
within the limits and under
conditions laid down by the
Council in accordance with
the provisions of this Treaty,
collect any information and
checks
any
carry
required for
the perfor-
mance of the tasks entrusted
to it.

out

(Article 284)

— To provide the Com-
munity and its Mem-
ber
with
States
objective, reliable and
comparable data at
European level on the
rac-
phenomena of
ism, xenophobia and
anti-Semitism.

— Close

cooperation
with the Council of
Europe in order to
avoid duplication and
obtain added value.

Source:

Information supplied by the Agency.

9,5 million euro (8,3 million euro)
including Community contribution:
100 % (100%):

Staff numbers
ber 2006:

at 31 Decem-

37 (37) posts in the establishment
plan,

posts occupied: 35 (35)

+ 10 (4) other staff (auxiliary con-
tracts, seconded national experts, local
and employment-agency staff)

Total staff: 47 (41)

Number of contributions through the
25 national focal points: 375

Number of meetings: 2

Research reports:

Number of reports: 9

Number of meetings: 5

Annual reports: 2

EUMC Bulletin: 6

Equal Voices: 3

Cooperation with the Member
States and the other institutions

assigned to the following duties

(number of events organised jointly):

— operational: 28 (24)

— Member States: 15

— administrative: 15 (13)

— Commission: 29

— mixed: 4 (4)

— European Parliament: 7

— COR: 2

— EESC: 1

— Council of Europe: 10

— OSCE: 4
— UN: 1
— Inter-agency: 4
— NRT: 4
— ERT: 1

— To study the extent and
development of the phe-
nomena of racism and
xenophobia;

— To collect and analyse
the
information,
European Racism and
Xenophobia Information
Network (RAXEN);

via

— To carry out scientific

surveys;

— To encourage widespread
dissemination of
such
information;

— To formulate opinions
for the Community and
its Member States;

— To develop indicators
and criteria to improve
the comparability of data;

— To publish an annual
report on the situation
regarding
racism and
xenophobia.

Composition

One independent person appointed by
each Member State, one independent
person appointed by the European Par-
liament, one
independent person
appointed by the Council of Europe and
a representative of the Commission.

Duties

To adopt the work programme and
the general annual report. To adopt
the final budget and the establishment
plan. To give an opinion on the final
accounts.

2. Executive Board

Composition

— Chairman of the Management

Board

— One representative of the uncil

of Europe

— One representative of the Com-

mission

— Two other members of the Man-

agement Board

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

4. External audit
Court of Auditors

5.

Internal control

The Commission’s Internal Audit Ser-
vice

6. Discharge authority
Parliament on a recommendation
from the Council.

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European Union Fundamental Rights Agency (Vienna) — Implementation of the budget for the financial year 2006

Table 2

Revenue

Source of revenue

Revenue entered in the final budget
for the financial year

Revenue received

Allocation of expenditure

Expenditure

Final budget appropriations

(1 000 euro)

Appropriations carried over from previous
financial year(s)

entered

com-
mitted

paid

carried
over

cancelled

entered

com-
mitted

paid

to be
carried
over

cancelled

Own revenue

Community subsidies

Allocated revenue
(Phare) (1)

Other revenue

Total

0

8 800

484

0

9 284

Title I
Staff

Title II
Administration

Title III
Operating activities

Allocated revenue
(Phare and others) (1)

0

8 800

484

132

9 416

3 923

3 743

3 693

50

180

70

70

53

969

923

640

283

46

581

581

570

3 908

3 695

2 753

942

213

667

667

647

484

325

239

245

Total

9 284

8 686

7 325

1 520

0

439

90

90

90

1 408

1 408

1 360

0

0

0

0

0

17

11

20

0

48

The amount initially entered in the budget was 648 000 euro, of which the Commission did not pay 164 000 euro. For the sake of clarity and accuracy, the corrected amount of 484 000 euro is shown.

(1)
Source: Data supplied by the Agency. This table summarise the data provided by the Agency in its annual accounts. Revenue collected and payments are estimated on a cash basis.

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19.12.2007

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Official Journal of the European Union

C 309/11

Table 3

European Union Fundamental Rights Agency (Vienna)
— Economic outturn account for the financial years 2006 and 2005

(1 000 euro)

2006

2005

Operating revenue

Community subsidies

Other revenues

Operating expenses

Staff expenses

Fixed asset related expenses

Other administrative expenses

Operational expenses

8 609

8

Total (a)

8 618

3 051

52

1 403

3 556

8 061

556

Economic result for the year (c = a – b)

Total (b)

Table 4

7 466

14

7 480

2 729

52

977

3 304

7 062

418

European Union Fundamental Rights Agency (Vienna) — Balance sheet at 31 December 2006 and 2005

(1 000 euro)

2006

2005

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

84

388

70

453

2 288

3 282

48

1 535

1 582

1 143

556

1 700

3 282

25

128

360

2 832

3 345

56

2 146

2 202

725

418

1 143

3 345

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 an accrual basis.

C 309/12

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Official Journal of the European Union

19.12.2007

THE AGENCY’S REPLIES

The reserve was included in Title III and intended to have
7.
a general purpose. The Agency specified the allocation of the
reserve between the various budgetary Titles in its 2007 budget.
The Agency will, however, devote particular efforts to provide
more complete justification and documentation of transfers
made.

8.
The Agency will proceed with the signature of agreements
with suitable local schools. The decision shall be submitted to the
Management Board, in October 2007, for adoption.

Although Annex III of the Staff Regulation is not appli-
9.
cable to other servants of the European Communities, the Agency
will propose, if the consultation with the Commission’s services
is finished in due time, to its Management Board to adopt, during
its October 2007 meeting, new implementing rules of the Staff
Regulations which will take into account the Court’s observations
to the maximum possible extent.

The Agency will take measures to avoid the repetition of

10.
the situation described by the Court.