Activity Report of OLAF Supervisory Committee (December 2005 — May 2007)
Date: 2008-05-20
Institutions: European Anti-Fraud Office, European Commission
Subjects: European Anti-fraud Office, activity report

20.5.2008

EN

Official Journal of the European Union

C 123/1

IV

(Notices)

NOTICES FROM EUROPEAN UNION INSTITUTIONS AND BODIES

COMMISSION

OLAF SUPERVISORY COMMITTEE

Activity Report of OLAF Supervisory Committee

December 2005 — May 2007

(2008/C 123/01)

Members of the OLAF Supervisory Committee

Rosalind WRIGHT

Chairman

Chairman of the Fraud Advisory Panel, United Kingdom

Kálmán GYÖRGYI

Chief Advisor to the Minister for Justice and Law Enforcement,

Attorney General of the Republic of Hungary (retired), Hungary

Luis LÓPEZ SANZ-ARANGUEZ

Public Prosecutor at the Supreme Court, Spain

Peter STRÖMBERG

Director of the Supervisory Board of Public Accountants, Sweden

Diemut R. THEATO

Former Member of the European Parliament, Former Chairman of the Committee of Budgetary Control,
Germany

C 123/2

EN

Official Journal of the European Union

20.5.2008

CONTENTS

FOREWORD BY THE CHAIRMAN TO THE SUPERVISORY COMMITTEE’S ACTIVITY REPORT . . . . . . . . . . . . . . . .

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

I.

I-1.

THE FORMATION OF THE PRESENT SUPERVISORY COMMITTEE AND ITS WORKING METHODS

The formation of the present Supervisory Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

I-1.1.

I-1.2.

The appointment of the Secretariat

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rules of Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

I-2.

Working methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

I-2.1.

I-2.2.

I-2.3.

Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Secretariat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rapporteurs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MONITORING OF OLAF’s INVESTIGATIVE FUNCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Regular monitoring at the Supervisory Committee’s initiative (article 11.1 of
Regulation (EC) No 1073/1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Regular monitoring based on information sent to the Supervisory Committee by the
. . . . . . . . . . .
Director General of OLAF (article 11.7 of Regulation (EC) No 1073/1999)

RELATIONS WITH OLAF, THE INSTITUTIONS AND OLAF PARTNERS AND STAKEHOLDERS . . . . . .

Relations with OLAF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

III-1.1. OLAF’s reorganisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

III-1.2. OLAF Manual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

III-1.3.

III-1.4.

Visit to OLAF teams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Jurisprudence of the European Courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Relations with the Community institutions and with OLAF’s partners and stakeholders

OPINIONS OF THE SUPERVISORY COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Opinion concerning the reform of the Regulation (EC) No 1073/1999 concerning
investigations conducted by the European Anti-Fraud Office (OLAF) . . . . . . . . . . . . . . . .

Opinion on Performance indicators for OLAF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Opinion on OLAF’s Reports of Investigations that have been in progress for more than
nine months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

II.

II-1.

II-2.

III.

III-1.

III-2.

IV.

IV-1.

IV-2.

IV-3.

IV-4.

Opinions on OLAF’s Preliminary Draft Budget for the years 2007 and 2008 . . . . . . . . .

Page

3

4

4

4

4

4

5

5

5

5

5

5

6

7

7

7

7

7

7

8

8

8

8

9

9

CONCLUSIONS AND RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10

ANNEX 1

Calendar of Supervisory Committee Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ANNEX 2

Opinion 2/2006, concerning the reform of the Regulation (EC) No 1073/1999 concerning
investigations conducted by the European Anti-Fraud Office (OLAF) . . . . . . . . . . . . . . . . . . . . 12

ANNEX 3

Opinion 3/2006, Performance indicators for OLAF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

ANNEX 4

Opinion 1/2007, OLAF’s Reports of Investigations that have been in progress for more than
nine months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

ANNEX 5

Opinion 1/2006, OLAF’s Preliminary Draft Budget for 2007 and Opinion 2/2007, OLAF’s
Preliminary Draft Budget for 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

20.5.2008

EN

Official Journal of the European Union

C 123/3

FOREWORD BY THE CHAIRMAN TO THE SUPERVISORY COMMITTEE’S ACTIVITY REPORT

The newly constituted Supervisory Committee of OLAF took office as from December 2005 and this Report
which I am pleased to submit covers our first 18 months in office.

OLAF is dedicated to fighting fraud, corruption and irregular behaviour to the prejudice of the European Com-
munity’s financial interests. The Supervisory Committee wholeheartedly supports OLAF’s efforts and is com-
mitted to working to safeguard OLAF’s independence in relation to its investigatory functions by regular
monitoring its casework, advising and offering constructive criticism where appropriate.

To this end, we have worked over the period that we have been in office to build up a comprehensive picture
of the way OLAF approaches its investigatory functions. We have examined its organisational structure and
considered whether it gives optimum scope for carrying out OLAF’s work with efficiency and economy. We
have delivered a number of hard-hitting opinions on the proposed reform of the relevant EU Regulations,
OLAF’s budgets, and OLAF cases still under investigation more than nine months after files were opened and
on a variety of other issues.

While it has become evident to us that OLAF investigatory staff are for the most part dedicated and committed
fraud specialists, aspects of OLAF’s human resources policy have given us some cause for concern. Chiefly this
has centred on the very high proportion of staff who are temporary agents. This issue has been raised by us on
many occasions, with OLAF itself and with the Commission, with some success, in that a number of staff have
recently been offered indefinite contracts. We have also looked at training of investigatory staff and will be
working closely with OLAF to assist the Director General in improving internal and external fraud investiga-
tion training in the coming months. We would also like to see a sharpening of OLAF’s leadership and man-
agement capabilities which will do a great deal to support flagging morale within the investigatory teams.

We look forward to carrying out constructive work in the future to help OLAF to improve its performance
and efficiency. OLAF is already a world-respected investigatory body; with our help and advice as an indepen-
dent Supervisory Committee we hope it will be able to move forward and achieve its goals.

I would particularly like to thank the Secretariat of the Supervisory Committee for its unstinting work over the
period we have been in office.

Rosalind WRIGHT

C 123/4

EN

Official Journal of the European Union

20.5.2008

INTRODUCTION

a term of one year. In December 2006 she was re-elected for a
second term.

The Supervisory Committee of the European Anti-fraud Office
(OLAF) was established for the purpose of reinforcing OLAF’s
independence by the regular monitoring of its investigative func-
tion, whilst refraining from interfering with the conduct of inves-
tigations in progress.

The Supervisory Committee also assists the Director General of
OLAF in the discharge of his responsibilities. In doing so, the
Committee’s aim is to support the work of OLAF and to ensure
that its investigative work is carried out to the highest standards.

It discharges its role principally by the submission of reports to
the Community institutions and by delivering opinions to the
Director General; by challenging, questioning and making recom-
mendations to OLAF for improvement, where it deems appropri-
ate and necessary.

The independence of the Committee is a key factor in safeguard-
ing OLAF’s own independence. The Supervisory Committee was
appointed by common accord of the European Parliament, the
Council and the Commission and is composed of ‘five indepen-
dent outside persons, who possess the necessary qualifications in
their respective countries to occupy senior posts relating to
OLAF’s areas of activities’ (1). They take no instructions from any
government, institution, body, office or agency and are also care-
ful to avoid any conflict of interest which might impair their inde-
pendence: in particular, any family or financial interests (2).

The Supervisory Committee is required to report to the institu-
tions on its activities on a yearly basis. Having regard to the time
taken during 2006 to establish the present Committee and its
supporting Secretariat,
it was felt that on this occasion an
extended report would better reflect the full range of its activities
and better meet the needs of the Community institutions. This
activity report is intended to stress the crucial role that OLAF
plays in the protection of the European Communities’ financial
interests.

Immediately after its appointment, the Committee set priorities
for its activities; above all, it was imperative that the Committee
and its Secretariat should have the appropriate tools to perform
their duties. The first tasks undertaken by the Supervisory Com-
mittee included the appointment of a new Secretariat and its relo-
cation to Brussels from Luxembourg, and the revision of the
Supervisory Committee’s own internal Rules of Procedure.

I-1.1. The appointment of the Secretariat

At its first meeting in December 2005, the Supervisory Commit-
tee held discussions with the Director General of OLAF for the
provision of a new Secretariat with particular reference to desir-
able competences and skills of its members prior to their appoint-
ment. The first members of the Secretariat were appointed and
endorsed by the Supervisory Committee in January 2006.

When the present Supervisory Committee was appointed, the
Secretariat was located in Luxembourg. Given the duty of the
Supervisory Committee to perform regular monitoring of OLAF’s
investigations, requiring high standards of data protection, secure
offices and access to the Case Management System (CMS), the
Supervisory Committee decided to relocate the Secretariat offices
from Luxembourg to the OLAF security zone in the premises in
Brussels within OLAF’s building previously occupied by the
former Supervisory Committee. This would allow the Secretariat
to carry out its functions efficiently, being thereby enabled to
question and discuss with OLAF staff particular issues as they
arise and would also facilitate every-day contact with other Com-
mittees and stakeholders. Location in Brussels also avoids the
heavy costs of regular travel for the members of the Supervisory
Committee and the Secretariat between Brussels and Luxembourg.

The archives of the former Supervisory Committee were moved
at the same time from Luxembourg and kept secure in a separate
archive and an inventory of the files was carried out.

I.

THE FORMATION OF THE PRESENT SUPERVISORY COM-
MITTEE AND ITS WORKING METHODS

I-1.2. Rules of Procedure

I-1.

The formation of the present Supervisory Committee

The present Supervisory Committee was appointed with effect
from 30 November 2005. At the first meeting in December 2005
in Brussels, Mrs Rosalind Wright was elected as the Chairman for

(1) Article 11.2 of Regulation (EC) No 1073/1999.
(2) Article 4 of the Rules of Procedure of the OLAF Supervisory Commit-
tee (OJ L 33, 7.2.2007) and Article 2 of Decision of the European Par-
liament, of the Council and of the Commission of 4 November 2005
appointing the members of the Supervisory Committee of the Euro-
pean Antifraud Office (OLAF) (OJ L 312, 29.11.2005, p. 49).

Having regard to the views of the Director General of the Legal
Service of the Commission in January 2006, and the conclusions
and recommendations of the Court of Auditors’ Special Report
No 1/2005 concerning the management of the European Anti-
fraud Office (OLAF) (3), the Supervisory Committee decided to
overhaul its Rules of Procedure to reflect the obligations imposed
on it by Regulation (EC) No 1073/1999 whilst refraining from
imposing obligations on third parties or giving the Supervisory
Committee legislative powers. The Rules were redrafted and
adopted by the Committee in August 2006 (4).

(3) OJ C 202, 18.8.2005.
(4) OJ L 33, 7.2.2007.

20.5.2008

EN

Official Journal of the European Union

C 123/5

The object of the Rules of Procedure is to facilitate the organisa-
tion of the Committee’s work. They include inter alia the prin-
ciples governing the activities of the Supervisory Committee, the
exercise of its powers, working methods and chairmanship, the
procedures for adopting opinions and the role of the Secretariat.

The allocation of an adequate number of personnel with the
appropriate skills and competences to the Secretariat is essential
in order for the Supervisory Committee to fulfill its legal mandate
in full independence.

I-2. Working methods

I-2.1. Meetings

During the reporting period the Supervisory Committee held six-
teen plenary meetings in Brussels (1). The Committee’s meetings
are not open to the public and all documents on which they are
based are confidential; however for the sake of transparency and
to provide regular information to the institutions on the Super-
visory Committee’s work, the Committee decided to make its
minutes available to OLAF, to the General Secretariats of the
European Parliament, of the Council and of the Commission.

From the beginning of its mandate, the Committee decided to
invite the Director General of OLAF, as well as other OLAF staff,
regularly to their meetings in order to familiarise themselves with
the functioning and working practices of OLAF and its internal
decision-making process. Throughout the reporting period, the
Director General of OLAF, the Investigations and Operations
Executive Board, all Directors, a number of Heads of Unit and offi-
cials of Operational and Support Units have made individual pre-
sentations of their work to the Committee.

In line with this approach, the Supervisory Committee has regu-
larly extended invitations to participate in its meetings to Com-
mittee stakeholders as well as to OLAF’s partners.

I-2.2. The Secretariat

The permanent Secretariat provided for the Supervisory Commit-
tee by OLAF is responsible for facilitating as well as contributing
to the performance of all tasks assigned to the Committee with a
view to reinforcing OLAF’s independence. The Secretariat ensures
the efficient performance of tasks assigned to the Supervisory
Committee, in particular, in relation to monitoring OLAF’s inves-
tigative function and supporting the work of the Supervisory
Committee (2).

The Secretariat constitutes an essential element in the Commit-
tee’s performance of its duties: ‘It shall in that respect assist the chair-
man in the preparations for and the conduct of meetings. It shall draw
up a draft agenda for each meeting, draw up draft minutes of meetings,
supply Committee members with information and documents relating to
every sphere of their activities, assist, under the chairman’s direction, in
the drafting of texts, and assist Committee members, especially when they
act as rapporteurs. For that purpose, members of the secretariat shall
attend meetings as necessary with rapporteurs in order to carry out those
tasks’ (3).

From the beginning of its term of office, the shortage of staff in
the Secretariat has been a matter of concern for the Committee
which repeatedly informed OLAF of its needs with no concrete
results until the end of June 2007, when OLAF finally provided
the Committee with a complement of support staff. The Supervi-
sory Committee has therefore worked for nearly eighteen months
with a marked staff shortage which has inevitably impacted on
the work plan outlined by the Committee for its mandate period.

This has led the Committee to recommend strongly that OLAF
make provision in the 2008 Budget for eight Secretariat staff
members, earmarking these posts specifically for the Secretariat,
as was done in the past. The Committee hopes that the institu-
tions take note of this recommendation.

I-2.3. Rapporteurs

The Supervisory Committee members have each taken on the task
of rapporteurs in order to prepare for its discussions or proceed-
ings as well as for the drafting of reports or opinions that were
adopted by the Committee (4). The rapporteurs have also had bilat-
eral meetings with the Director General of OLAF and other senior
officials on the topics entrusted to their responsibility.

II.

MONITORING OF OLAF’s INVESTIGATIVE FUNCTION

II-1.

Regular monitoring at the Supervisory Committee’s ini-
tiative (article 11.1 of Regulation (EC) No 1073/1999)

The Supervisory Committee actively and regularly monitors the
way in which investigations are carried out by OLAF in order to
reinforce OLAF’s independence. The Supervisory Committee can
independently select, on criteria predefined by the Committee (5),
a number of cases from each sector and examine complete files
as well as evaluation reports, final case reports, or any other indi-
vidual document. Monitoring activity covers OLAF cases under
investigation and cases under assessment as well as completed
cases.

The Supervisory Committee deals with systemic aspects of OLAF’s
investigative practice and also examines situations when OLAF’s
independence could be at risk in the course of an investigation.
Taking into consideration the lengthy duration of certain investi-
gations, it was a priority for the Committee to examine old cases
which were still active.

(1) See Annex 1.
(2) Article 12 of the Rules of Procedure of the OLAF Supervisory Com-

mittee (OJ L 33, 7.2.2007).

(3) Ibid Article 12.4 (OJ L 33, 7.2.2007).

(4) Ibid Article 8 (OJ L 33, 7.2.2007).
(5) i.e. investigations in progress for more than nine months, seriousness
of the alleged irregularity, financial impact, source of information etc.

C 123/6

EN

Official Journal of the European Union

20.5.2008

During the reporting period a number of discussions took place
between the Supervisory Committee and the Director General of
OLAF with a view to agreeing a working practice for access to
case files, including ongoing investigations. OLAF raised concerns
about giving the Supervisory Committee full access to on-going
case files citing the issue of potential restrictions based on per-
sonal data protection rules
in light of Regulation (EC)
No 45/2001. A considerable amount of time was spent on this
debate with the Director General of OLAF and the OLAF Data
Protection Officer, the Supervisory Committee being fully aware
of its responsibilities in the field of data protection as laid down
in the Regulation (EC) No 1073/1999 (1).

OLAF allowed access by the members of the Secretariat to its elec-
tronic case management system (CMS) in April 2006, which
allows them to view most of the documents of cases at the fol-
lowing stages: follow-up, follow-up completed, no follow-up,
monitoring cases and closed cases. No electronic access was given
to cases under investigation. At the end of the reporting period a
working solution was finally reached with the Director General of
OLAF, which has allowed the Committee full access for the pur-
pose of examination of those cases requested.

In light of the above obstacles, the Committee has not been in a
position to carry out its monitoring responsibility as fully as it
would have wished. Several complete files were examined in 2006
and four more are currently under evaluation. It is the intention
of the Supervisory Committee to deliver an opinion on these
cases.

II-2.

Regular monitoring based on information sent to the
Supervisory Committee by the Director General of OLAF
(article 11.7 of Regulation (EC) No 1073/1999)

The Supervisory Committee felt that OLAF would benefit from
more active follow up and reaction to the information sent regu-
larly to it by the Director General of OLAF (2). For that reason spe-
cial attention has been paid to the monitoring role of the
Committee in this respect.

The Director General of OLAF has forwarded to the Supervisory
Committee monthly summaries of those cases where investiga-
tion had been in progress for more than nine months. Taking into
consideration that 75 % of OLAF’s investigations had been open
for a longer period, it proved instructive to look closely at all cases
currently on OLAF’s books, on a month by month and sector by
sector basis, and to examine the reasons for any egregious delays
in the investigation process and expected time for completion.

The Supervisory Committee examined all 150 reports of investi-
gations of this type during the period January to December 2006
and issued an opinion containing clear and specific recommen-
dations
to
May 2007 65 reports were examined by the Committee and will
be the subject matter of a separate opinion covering the period
from January to December 2007.

From January

25th April,

2007 (3).

on

During the reporting period the Director General forwarded to
the Supervisory Committee reports on OLAF cases where infor-
mation had been forwarded to the national judicial authorities of
a Member State. The majority of these cases were presented by
OLAF’s magistrates from the Judicial and Legal Advice Unit in the
meetings of the Supervisory Committee so that substantive and
procedural aspects of investigations were discussed with the
Committee (4).

In this field the Committee focused its attention on four main
areas: (i) due account of the time barring (prescription) periods of
investigations sent by OLAF to the national judicial authorities, (ii)
the apparent insufficient degree of involvement of the Magistrates
Unit in the course of the investigations, (iii) the need for investi-
gation reports to take into account the procedural requirements
laid down in the national law of the Member State concerned
and (iv) an assessment of the quality and usefulness of OLAF’s
investigation reports for the national judicial authorities. In the
circumstance, the Committee took the initiative regularly to
extend invitations to highest level judicial representatives from the
Member States to future meetings. A first invitation was duly
extended to the General State Prosecutor of Spain who accepted.

The Director General is under an obligation to inform the Super-
visory Committee of cases where the institution, body or agency
concerned has failed to act on his recommendations. In the period
of this report, no such cases were referred to the Committee. The
Committee needs this information in order to be in a position to
take prompt action.

The Committee also received regularly monthly statistics on
OLAF operational activities which were subsequently reviewed by
the Committee. The bare statistical information contained in these
reports was of little practical use to the Committee and an opin-
ion was delivered recommending that the Director General of
OLAF set up clear performance indicators based not only on
quantitative but also on qualitative parameters (5).

In addition, the Committee received from OLAF the OLAF Annual
Management Plan covering its operational activity for 2006. The
Committee noted that, though laudable, the objectives set out in
the plan were not specific, for most part not capable of measure-
ment or realizable within stated timeframe.

(1) Article 8.4.
(2) Court of Auditors’ Special Report No 1/2005 (OJ C 202, 18.8.2005,

(3) See Annex 4.
(4) Between December 2005 and May 2006 a total of 34 cases were
reported under this scheme, of which 10 were open investigations.

p. 1).

(5) See Annex 3.

20.5.2008

EN

Official Journal of the European Union

C 123/7

Following a suggestion from the European Parliament (1), the
Supervisory Committee has analysed a representative sample of
the prima facie non cases (2) covering all sectors, a large number of
which is still the subject of an analysis.

III-1.2. OLAF Manual

III.

RELATIONS WITH OLAF, THE INSTITUTIONS AND OLAF
PARTNERS AND STAKEHOLDERS

III-1. Relations with OLAF

III-1.1. OLAF’s reorganisation

At the beginning of the reporting period the Director General
explained to the Committee the changes envisaged in OLAF’s
structure and the future adoption of a new organisational chart,
which took place in September 2006. The Supervisory Commit-
tee had previously recommended that he undertake an analysis of
OLAF’s strengths, weaknesses, opportunities and threats (SWOT)
prior to the adoption of the new structure and as a point of ref-
erence for OLAF. This analysis by OLAF was submitted to the
Committee as a draft only in March 2007.

The Committee had a number of concerns about the manner in
which the reorganisation was carried out and its effect on OLAF’s
efficiency. The Committee was surprised and disappointed that
OLAF did not see fit to carry out its own SWOT analysis before
making the organisational changes, pointing to the risk of the
effectiveness of the new structure being undermined and a con-
sequential deleterious effect on the performance of its investiga-
tion powers. The Committee considered it sensible for the
Directorate of Investigations and Operations to be split into two,
as this emphasised OLAF’s core investigatory function. However,
permanent and close co-ordination between the two Directorates
is necessary in order to implement properly the required investi-
gation policy of OLAF.

The Committee was particularly concerned that the change of
name and therefore an indication of a change in function of the
Magistrates’ Unit to ‘Judicial and Legal Advice’ together with its
detachment from the Director General would weaken its ability to
support OLAF’s independence by guaranteeing the legality of pro-
cedures in progress. Having a full complement of members of the
judiciary or senior prosecutors from Member States within OLAF,
also facilitates the uptake of investigations by national judicial
authorities. The Committee noted with some anxiety that the
Magistrates’ Unit had lost a number of magistrates from Member
States who had not been replaced. The lack of clear involvement
of this Unit in evaluation and investigative work might also ham-
per the proper assessment of the procedural and evidence require-
ments to ensure successful prosecution of cases.

(1) 2005/2184/(INI), point 22.
(2) OLAF Manual, page 99, Prima Facie Non-Cases: where information is
received which clearly and unequivocally does not fall within the com-
petence of OLAF.

The Supervisory Committee considered that the existing opera-
tional chapters of the OLAF Manual did not constitute a set of
clear procedural rules for investigations. The rules are too diffuse
and densely drafted to be of immediate practical use for OLAF
investigators. The Committee was persuaded that the adoption of
a clear, practical and useful guide for investigations, including
strict deadlines within which separate stages of an investigation
must be completed, would reinforce OLAF’s independence in this
field. The Committee recommended that a new manual for opera-
tions be prepared.

At the end of the reporting period, the Director General sent to
the Committee a revised short version of the OLAF Manual which
did not meet the expectations of the Committee, but he confirmed
his commitment to drafting a revised Manual in accordance with
the Committee’s recommendations by the end of 2007.

III-1.3. Visit to OLAF teams

Over two days in November 2006 the Chairman met members of
staff of the OLAF Investigations and Operations Units to obtain
their opinion on how OLAF’s investigations were conducted and
any problems which the teams had encountered in their every day
work.

During her visit the Chairman met most of the team members of
the eight Investigation and Operations Units in OLAF together
with all the Heads of Unit. The items discussed included: (i) the
limitations of the legal basis for OLAF’s work in some sectors as
well as its restricted legal capacity to represent its position; (ii) the
heavy administrative workload for investigators; (iii) overwork,
understaffing of the Units and the issue of temporary agent staff;
(iv) the particular expertise necessary in the area of financial inves-
tigatory support; (v) the need for a short procedural OLAF Manual;
(vi) the advisory role of the Magistrates’ Unit; (vii) the question of
OLAF’s visibility within the institutions as well as the pressing
need for strong management support and effective leadership.
The memorandum on the visit was discussed with the Director
General in March 2007.

III-1.4. Jurisprudence of the European Courts

Over the reporting period, the Committee has closely followed
the judgments of the European Courts concerning OLAF. In par-
ticular, Judgment T-309/03 was examined and discussed with
OLAF’s Director General. The Supervisory Committee expressed
its concern and recommended to him that he re-examine OLAF’s
procedures and put in place rigorous internal control mechanisms
to avoid any conflict of interest that could jeopardise the indepen-
dent conduct of investigations and OLAF’s reputation in the
future.

C 123/8

EN

Official Journal of the European Union

20.5.2008

III-2. Relations with the Community institutions and with

IV.

OPINIONS OF THE SUPERVISORY COMMITTEE

OLAF’s partners and stakeholders

The Supervisory Committee identified as a priority the maintain-
ing of regular contacts with the Community institutions and
OLAF’s partners and stakeholders. Bearing in mind that OLAF has
no powers to bring prosecutions or administrative or disciplinary
proceedings, close co-operation between OLAF and the institu-
tions and competent bodies, and as well as proper follow up of
OLAF’s recommendations remain essential for the successful out-
come of OLAF’s investigations. The Supervisory Committee was
particularly conscious of the importance of improving the flow of
information between the institutions and Member States authori-
ties and OLAF by a more proactive implementation of the provi-
sions relating to the duty to inform OLAF (1). The Supervisory
Committee’s role is also to assist OLAF to ensure that all parties
obliged to co-operate with it actually do so and that the spirit of
the Inter-institutional Agreement of 25 May 1999 is observed.
Member States as well as institutions and competent bodies need
clear signals to avoid acting in a way which might actively impede
the work of OLAF.

In order to pursue these objectives as well as to obtain feedback
about OLAF, the Supervisory Committee met twice with the
Committee on Budgetary Control of the European Parliament
(COCOBU) and with the Court of Auditors; with the Vice-
President of the Commission, Mr Kallas; with the Secretary Gen-
eral of the Commission, Mrs Day; with the Director of the
Investigation and Disciplinary Office of the Commission (IDOC),
Mr Van Lier; with the President of the Council’s Working Group
on Fight Against Fraud during the German Presidency, Mr Wetz
and with the President of Eurojust, Mr Kennedy.

From these discussions, the Supervisory Committee concluded
that greater cooperation between the Commission Directorates
General and OLAF was necessary; that OLAF and the institutions’
communication policy on OLAF’s investigations should be based
on the twin premises of transparency and inter-institutional loy-
alty enabling a more coherent communication to the general pub-
lic; that adequate mechanisms must be put in place in order to
exclude de minimis cases from OLAF’s remit, which should be lim-
ited to serious matters pursuant to a clear investigation policy (to
be defined by OLAF); a policy of ‘zero tolerance’ for fraud and cor-
ruption does not necessarily mean that OLAF has to take on board
all cases where other mechanisms exist to deal with less serious
matters. Finally, improvement is needed in the exchange of infor-
mation between OLAF and Eurojust; the Supervisory Committee
is ready to facilitate all relations between the two.

IV-1. Opinion concerning the reform of the Regulation (EC)
No 1073/1999 concerning investigations conducted by
the European Anti-Fraud Office (OLAF) (2)

From the beginning of its term of office, the Supervisory Com-
mittee closely followed developments in the area of the proposal
to reform the Regulation (EC) No 1073/1999. The Committee
welcomed the Commission’s determination to support OLAF’s
work and to improve its operational efficiency. At the request of
the Vice-President of the Commission, Mr Kallas, the Committee
expressed its main concerns on the proposal for reform, a certain
number of remarks focusing on the procedural rights of persons
under investigations; the length of investigations, institutional
aspects of the text and the role of the proposed Review Adviser
were also examined.

Regarding independence issues relating to investigations, particu-
lar attention was paid to the envisaged inter-institutional antifraud
committee composed of political representatives from the insti-
tutions which would replace the existing Supervisory Committee.
The Committee considered that it would not be better placed to
ensure OLAF’s independence. On the contrary,
taking into
account OLAF’s competence to conduct administrative investiga-
tions within the institutions, there could be the risk of its becom-
ing a source of inter-institutional tensions. OLAF is already subject
to institutional scrutiny (3).

Likewise, the Committee questioned the independence of the
envisaged Review Advisor appointed by the Director General as a
quality controller and complaints advisor for OLAF’s investiga-
tions. His role overlaps with the Supervisory Committee’s moni-
toring competences and with the quality control functions already
attributed to the senior managers of OLAF.

Particular mention was also made of the rights of persons under
investigation requiring further protection de lege ferenda. The
Supervisory Committee was of the view that the time allowed for
investigation procedures should not be extended and finally it
stated that the duration of the investigations could be shortened
by the filling of vacant investigator posts together with tighter
managerial control.

IV-2. Opinion on Performance indicators for OLAF (4)

The Supervisory Committee directed its attention to the results
achieved by OLAF’s investigations and actively encouraged OLAF
to produce relevant performance indicators.

(1) Article 7 of Regulation (EC) No 1073/1999.

(2) See Annex 2.
(3) Article 12.3 of Regulation (EC) No 1073/1999.
(4) See Annex 3.

20.5.2008

EN

Official Journal of the European Union

C 123/9

The Committee recommended to the Director General of OLAF
that OLAF should establish specific performance indicators for
their different fields of activity not only based on quantitative but
also on qualitative parameters. As to the workload of the investi-
gations which is directly linked to the area of investigation policy,
the Committee also recommended the implementation of specific
mechanisms for the measurement of the timelines of procedures.
In addition, the Supervisory Committee recommended to the
Director General that OLAF carry out a customer stakeholder sur-
vey to be based on reports from various partners The survey
would measure the level of achievements of objectives and tar-
gets in a regular and on-going manner. The Director General
agreed to carry out such a survey, which is scheduled to start in
September 2007.

IV-3. Opinion on OLAF’s Reports of Investigations that have
been in progress for more than nine months (1)

The Supervisory Committee examined 150 reports of this type of
investigation covering the period from January to December
2006 across all sectors of investigations and operations. The aim
of the analysis was to check whether investigations were con-
ducted continuously over a period proportionate to the circum-
stances and the complexity of the case and to identify reasons for
potential undue delays.

The Supervisory Committee acknowledged that while these
reports contained relevant and useful information, essential infor-
mation that would enable the Committee to fulfil properly its
monitoring function was missing.

The Committee made specific recommendations to the Director
General of OLAF to incorporate in future reports specific infor-
mation that could be useful for both Supervisory Committee pur-
poses and the internal OLAF management in charge of the
conduct of investigations. This included when the facts under
investigation took place; time barring (prescription) periods of
acts under investigation; the legal description of the irregularity
under investigation; potential sanctions or legal consequences of
the acts under investigations and the expected time for comple-
tion together with a reasoned explanation. The Supervisory Com-
mittee also recommended the omission of ‘tactical hold’ as a
reason for not having concluded an investigation and expressed
dismay at the lack of a clear investigation policy.

These recommendations were accepted by the Director General of
OLAF. However action has yet to be taken by OLAF in relation to
the Supervisory Committee’s recommendations that clearer inves-
tigatory procedures and better supervision of casework be
instituted.

(1) See Annex 4.

IV-4. Opinions on OLAF’s Preliminary Draft Budget for the

years 2007 and 2008 (2)

The Committee is aware that OLAF’s independence in budgetary
and administrative matters has a direct impact on the investiga-
tions and operations field. The Supervisory Committee is to be
consulted by the Director General on OLAF’s preliminary draft
budget prior to it being sent to the Director General in charge of
budgets (3).

During the reporting period, the Supervisory Committee issued
two opinions on this matter. With regard to OLAF’s preliminary
draft budget for 2008, the Committee recommended that OLAF
request additional posts solely within the investigative function
which must be strengthened in accordance with the new struc-
tural organisation. The Committee also recommended to the
Director General of OLAF the earmarking of posts of the mem-
bers of the Secretariat in order to fulfil its mandate in full inde-
pendence. However, neither of these recommendations was in
fact incorporated by the Director General into OLAF’s preliminary
draft budget for 2008.

Regarding temporary agents, who represent approximately 20 %
of OLAF staff, the greater part of whom work in the area of inves-
tigations conduct and support, the Committee recommended per-
manent rather than temporary posts within OLAF to ensure the
continuity, efficiency and independence of investigations. The
lack of working stability in this sector affects the loyalty, motiva-
tion and commitment of the staff to OLAF.

The Committee addressed its concern regarding this matter to the
Vice-President of the Commission, Mr Kallas, and welcomed the
agreement reached in May 2007 between OLAF, the Directorate
General for Administration of the Commission and the staff rep-
resentatives anticipating a screening procedure to award an exten-
sion for an unlimited period of the temporary agents. However
the Supervisory Committee has noted that OLAF does not oper-
ate independently from an administrative viewpoint, its human
resources policy being enforced by the Directorate General for
Administration. This is a matter of concern for the Committee
since it has a direct impact on the investigative function of OLAF.

In the area of human resources the Committee also noted an
urgent need for OLAF to invest more in management, which is
fundamental for the investigation support function, key to OLAF’s
independence. The Supervisory Committee strongly recommends
that OLAF adopt a firm human resources strategy in order to
maximise the use of existing resources in the investigation area,
to better manage its workload and to organise the investigative
teams accordingly. The Chairman, having participated as an
observer in OLAF training sessions, recommended that particular
attention be paid by the Committee to the needs of investigators
with regard to adequate and continuous training.

(2) See Annex 5.
(3) Article 6 of the Commission Decision of 28 of April 1999 (OJ L 136,

31.5.1999, p. 20).

C 123/10

EN

Official Journal of the European Union

20.5.2008

CONCLUSIONS AND RECOMMENDATIONS

I.

II.

III.

IV.

The Supervisory Committee’s primary purpose is to rein-
force OLAF’s independence by the regular monitoring of its
investigative function. The independence of the Committee
is therefore a key factor in safeguarding OLAF’s own
independence.

In carrying out its monitoring function, the Supervisory
Committee has sought full access to OLAF case files on the
electronic case management system (CMS). This access was
not permitted in relation to cases under investigation dur-
ing the period under report. This has proved a serious
obstacle to the Committee’s ability to carry out its remit.

The Supervisory Committee has monitored a number of
paper files and considered 215 reports of cases where the
investigation has exceeded nine months. In these cases, the
Committee has recommended radical changes to the infor-
mation contained in the reports designed to give detailed
reasons for egregious delays in investigations and to draw
attention to potential time-barring (prescription) periods.

The lack of clear investigatory procedures and of structured
supervision of investigations contributes to the delays
referred to above. The Supervisory Committee recommends
that OLAF adopt a clear investigation policy. The Commit-
tee strongly recommended a complete redrafting of the
operational chapters of the OLAF’s procedural Manual to
provide a clear and useful working tool for investigators,
including strict deadlines within which separate stages of an
investigation must be completed.

V.

The Supervisory Committee has strongly recommended
that OLAF establish rigorous internal control mechanisms
to avoid all possible conflicts of interest which could endan-
ger the independent conduct of its investigations.

VI. OLAF staff morale has been deleteriously affected by the
recent uncertainty of temporary contracts and the Supervi-
sory Committee recommended that this issue be urgently
resolved; by the end of the reporting period, this has been
partially addressed.

VII.

In view of the pressing need that the Supervisory Commit-
tee identified for strong management support and effective
leadership, the Committee strongly recommends improve-
ment in management and leadership techniques to support
effective teamwork and investigatory performance.

VIII. The Supervisory Committee has developed contacts with
Community institutions and with OLAF’s partners and
stakeholders and recommends that benefit would be derived
from closer cooperation between the Commission and
OLAF and in the improved exchange of
information
between OLAF and Eurojust.

IX.

X.

The Supervisory Committee has followed closely the
changes envisaged in OLAF’s organizational restructuring
and the proposals for radical amendment to Regulation (EC)
No 1073/99 which governs OLAF’s investigatory function.
The Committee is anxious that organisational changes
should not diminish the role of the Magistrates Unit within
OLAF who, with their specialised knowledge of the appli-
cable law and procedures and local contacts, are able to
facilitate the uptake of investigations by Member States. The
Supervisory Committee was also anxious that proposed
changes to the Regulation should not compromise OLAF’s
independence or the role played by the Committee itself.

The Supervisory Committee strongly recommended that
OLAF’s investigative teams be strengthened by additional
posts; that improvements be introduced to its training for
investigators; and, to ensure the effective working of the
Committee itself, adequate staffing be provided for the
Supervisory Committee’s Secretariat and that sufficient
posts for the Secretariat be earmarked.

20.5.2008

EN

Official Journal of the European Union

C 123/11

ANNEX 1

CALENDAR OF SUPERVISORY COMMITTEE MEETINGS

2005

Month

Meeting date

December

Wednesday, 14

2006

Month

Meeting date

January

February

March

April

May

June

July

September

October

November

December

January

March

April

Wednesday, 25 — Thursday, 26

Tuesday, 21 — Wednesday, 22

Monday, 20 — Tuesday, 21

Tuesday, 25 — Wednesday, 26

Tuesday, 30

Tuesday, 13 — Wednesday, 14

Monday, 3 — Tuesday, 4

Monday, 25 — Tuesday, 26

Tuesday, 17 — Wednesday, 18

Monday, 13 — Tuesday, 14

Wednesday, 13 — Thursday, 14

2007

Month

Meeting date

Monday, 29 — Tuesday, 30

Monday, 5 March

Monday, 26 March — Tuesday, 27

Tuesday, 24 April — Wednesday, 25

C 123/12

EN

Official Journal of the European Union

20.5.2008

ANNEX 2

OPINION No 2/2006

concerning the reform of the Regulation (EC) No 1073/1999 concerning investigations conducted
by the European Anti-Fraud Office (OLAF)

1. At its meetings of 21-22 February, 20-21 March and 25-26 April 2006 the OLAF Supervisory Committee (hereinafter
‘the Committee’) has discussed a proposal for a Regulation of the European Parliament and the Council amending Regu-
lation (EC) No 1073/1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF) (‘draft’). Ms
D. Theato and Mr K. Györgyi were appointed rapporteurs.

The Committee expressly welcomes the Commission’s determination to support OLAF’s work and to improve its opera-
tional efficiency and effectiveness wherever possible.

The following remarks focus on the problem areas highlighted by the Committee:

— the procedural rights of persons under investigation;

— the length of investigations;

— and institutional aspects of the draft.

2. The procedural rights of persons under investigation

The draft rightly points out the need to clarify the guarantees applicable to investigations. Clarification is needed to pro-
vide legal certainty and is also in the interest of anyone under investigation. The Committee therefore welcomes new
Article 7a. In particular, it makes it clear that investigations should aim to uncover evidence both for and against the
person concerned.

All OLAF investigations not concluded elsewhere are ultimately referred to an independent criminal court in a Member
State, where they become the subject of official proceedings in accordance with national law and are covered by the usual
procedural guarantees. However, the Committee is of the opinion that the rights of the person under investigation require
further protection de lege ferenda than provided in the draft. In particular:

— The procedure must be fair and based on the assumption of innocence (Article 6 of the European Convention on

Human Rights).

— According to the draft, the person concerned will be informed only of the conclusions and recommendations of
the final report. However, these may not suffice to submit a complaint to the Review Adviser, as a complaint will
challenge the way in which OLAF arrived at its final conclusions. It must be possible for the appellant to see how
the decision was arrived at. And so, in order to enable appellants to exercise their right of defence, they must be
guaranteed access to the entire report or to all items of evidence concerning them.

In exceptional circumstances the Director-General may withhold access to information concerning the person
under investigation until it has been forwarded to the appropriate authorities/bodies. How can the Review Adviser
exercise control in such cases? Is there no review in such cases?

— To ensure that the investigation is fair, where there are grounds to believe that investigators might not act inde-

pendently in the performance of their duties, they should not be allowed to take part.

— The person under investigation should have the right to submit evidence.

Strengthening the procedural rights of the person under investigation would also enhance the credibility of OLAF inves-
tigations and their findings.

20.5.2008

EN

Official Journal of the European Union

C 123/13

3. The length of investigations

Article 6 of the current OLAF Regulation requires investigations to be conducted without interruption. Their duration
must be proportionate to the circumstances and complexity of the case. Under Article 11(7) of the current OLAF Regu-
lation, where an investigation has been in progress for more than nine months, the Director must inform the Supervi-
sory Committee of the reasons why it has not been possible to bring the investigation to a conclusion.

Under a special procedure provided for in Article 6(7) of the draft Regulation, investigations that have not been con-
cluded within twelve months may be extended for up to six months and then further extended under the same conditions.

The Committee believes this sends out the wrong signal. The current nine-month period is in itself dubious. While a
number of reasons may cause certain investigations to take longer, the Committee is of the view that the time allowed
for the procedures should not be extended and recommends instead that the draft should incorporate the principle of
urgency. The Committee believes that it may be possible in a number of cases to shorten the duration of the investiga-
tions by, for example, filling some 70 posts currently vacant or by stepping up managerial control over the duration of
the procedure.

4.

Institutional aspects

— The Supervisory Committee is of the opinion that the necessary independence of OLAF investigations should be

further strengthened in law. It proposes incorporating the following main priorities in the draft:

— OLAF should have the discretion to decide independently which investigations to embark on and how they

are to be conducted.

— OLAF should bear sole responsibility for the blueprint of its investigations.

— OLAF should devise its own operational policy, including its anti-fraud and corruption prevention policy,

albeit in close coordination with all competent European and national bodies.

— Greater emphasis should be given to its mandate to combat fraud and corruption.

— Generally speaking, experience has shown that cooperation between OLAF and the Member States needs to be
improved to ensure that the European Union’s financial interests are protected effectively. Cooperation cannot be
just a one-way street leading from OLAF to the Member States. There also needs to be an exchange of information
between the Member States and, in particular, between the competent judicial authorities in the Member States and
OLAF.

Special attention should be paid to OLAF’s involvement in external investigations conducted by the authorities in
the Member States.

— The Committee expressly welcomes the fact that, as a general principle, the draft retains the Supervisory Commit-
tee as an independent expert body that comprises representatives of the Parliament, Council and Commission only
for the ‘structured dialogue with the institutions’.

It should, however, be clear from the outset that the representatives of the three institutions in the structured dia-
logue have a mandate dictated by their institution and the independent persons have an open mandate. While the
structural dialogue has many advantages, in particular with regard to relations between the institutions, it is likely
to politicise to a certain extent OLAF’s work. The standard political control of OLAF is already ensured by, for
example, the budgetary discharge procedure without this structural dialogue.

In a structured dialogue between the institutions involving a single representative from the Council, Parliament and
the Commission, the Supervisory Committee risks losing its independence on key matters that may even include
the production of its activity report.

It is unclear what is meant by ‘in order to devise common guidelines’.

Article 8 of the draft removes the Supervisory Committee’s co-responsibility for data protection and professional
confidentiality without any reason whatsoever being given.

Article 11 of the draft restricts the Supervisory Committee’s rights to information. As a consequence of the amend-
ment proposals contained in paragraphs 1 and 7, the Supervisory Committee will receive less factual information
on investigations conducted by the Office than has hitherto been the case.

C 123/14

EN

Official Journal of the European Union

20.5.2008

Article 12 of the draft raises questions regarding the inter-institutional nature of the powers of OLAF’s Director-
General. The Director-General has, until now, been appointed by agreement of the Council and Parliament. This
gives the position a special legitimacy. In future the Commission will merely consult the Supervisory Committee
within the framework of a structured dialogue and will then designate the Director-General. The Supervisory Com-
mittee sees this as greatly undermining the Director-General’s legitimacy.

In view of the problems involved in renewing the mandate of OLAF’s current Director-General on completion of
his first term, however, the Committee welcomes the proposal that the seven-year term should not be renewable.
This should strengthen the Director-General’s independence and obviate the problem of undesirable interregnum
periods. (The terms OLAF Director [OLAF-Direktor] and Director-General of the Office [Generaldirektor des Amtes]
in the draft need to be harmonised.).

The current proposal regarding the Supervisory Committee’s secretariat does not go as far as the Commission pro-
posal of February 2004, which attached the secretariat to the Commission for administrative purposes. The draft
attaches it to the Office, which may impinge on the independence of the Supervisory Committee itself.

The Committee understands why the draft introduces the position of Review Adviser. However, it questions
whether the Review Adviser can act ‘in complete independence’ if he is appointed and possibly reappointed by the
Director-General and depends on him administratively, especially for performance appraisal and promotion.

The draft should also make it clear that the Supervisory Committee can act not only on the basis of statistical and
analytical reports drafted by the Review Adviser. To be able to perform its primary task of regularly monitoring
OLAF’s investigations, the Committee must have access to cases and not just to the Review Adviser’s statistics, analy-
sis and observations. There should be a clear demarcation of duties, and the Committee’s most important task,
ensuring the Office’s independence, must be safeguarded.

With all its references to other legislative instruments, Article 16 of the draft is by no means a shining example of
clear legislation.

In general, the provisions contained in Regulation (Euratom, EC) No 2185/96 should be incorporated in the draft.
This would consolidate all of OLAF’s investigative powers in one legal instrument and thereby simplify and facili-
tate the application of the law.

5. These comments refer to the text that was submitted for inter-service consultation. Since then, the Supervisory Com-
mittee has received further oral information on 30 May, 14 June and 4 July 2006. It reserves the right to submit a supple-
mentary opinion on the Commission’s final written proposal.

SUPPLEMENTARY OPINION

concerning the reform of the regulation (EC) No 1073/1999 concerning investigations conducted by the
European Anti-Fraud Office (OLAF)

1. With its Opinion N° 2/2006 the OLAF Supervisory Committee has welcomed the Commission’s determination to
improve OLAF’s operational efficiency and effectiveness and has made a certain number of remarks focusing on the pro-
cedural rights of persons under investigation, the length of investigations and institutional aspects of the draft.

These comments referred to the text that was submitted for the Commission’s inter-service consultation. This comple-
mentary opinion refers to the final proposal which the Commission has in the meantime presented to the European Par-
liament and to the Council (1).

2. At its meeting dated 25/26 Sept. 2006 the Supervisory Committee has in particular examined the role of the Review

Adviser. The Committee concluded that the creation of such a role would:

— add another monitoring step to those already in place despite the fact that there appears to be no evidence that

those already in existence are inadequate;

(1) COM (2006) 244 final.

20.5.2008

EN

Official Journal of the European Union

C 123/15

— complicate and prolong procedures when both the European Parliament and the Council have requested that inves-

tigations should be as short as possible;

— question to what extent the mandate of the Review Advisor would dilute the OLAF Director General’s responsibility;

— overlap to some extent with the role of the Supervisory Committee, create the risk of duplication and weaken in
general the role of the Committee, whereas this Committee alone has been appointed by common agreement
between the European Parliament, the Council and Commission;

— give to the Review Advisor the dual role of quality controller and complaints advisor where he/she would be both
reporting to and monitoring OLAF’s Director General, these roles being totally contradictory. In the OLAF orga-
nization chart, adopted by the Commission as of 01/09/2006, the role of quality control is already attributed to
two Advisors attached to the Directors of the two Directorates in charge of all investigations;

— Though the Commission proposal does not include any analysis of the financial impact, the Committee estimates
this cost to be out of proportion with the very small number of cases presented up to the present day and thus
incompatible with the principle of value for money.

C 123/16

EN

Official Journal of the European Union

20.5.2008

ANNEX 3

OPINION No 3/2006

of the Supervisory Committee

Performance indicators for OLAF

1. The Supervisory Committee (SC) has discussed at its meetings dated 21/22nd of February, 20/21st of March and 25/26th
of April 2006 the topic of performance indicators and agreed with OLAF to contribute actively to the further develop-
ment of these indicators.

2. Performance indicators for the different fields of activity will allow OLAF to focus more on results and to enhance
in general the quality of the services rendered in particular to the European institutions, judicial authorities of Member
States and to the general public whilst protecting the Communities’ financial interests and continuing its fight against
fraud and other illegal activities detrimental to the Communities’ financial interests.

3. OLAF has — as set out in the Director General’s note for the attention of the SC dated 12th of April 2006 — already

started work on the development of performance indicators.

The bulk of the existing indicators relates to OLAF’s operational ‘activities and outputs’ and are of a quantitative/statistical
nature. These indicators do allow OLAF to measure numbers, such as the number of investigations or intelligence activi-
ties etc … The SC recognizes the utility of a solid statistical basis and of quantitative indicators and encourages OLAF to
pursue its work on the improvement of the reliability of statistical data.

4. The SC notes that ‘reflection on quality indicators has started’ (OLAF’s note dated 12/04/2006).

In conformity with the internationally recognized methodology for performance measurement, the Supervisory Com-
mittee stresses the necessity to measure OLAF’s performance in the different fields of activity in the future
through qualitative as well as quantitative parameters which will allow the measurement of outcomes and results
and not just activities or outputs.

5. Quality is usually measured by assessing how far an organisation has met its targets in terms of outputs, outcomes. This
is usually measured by evaluating quantifiable aspects of the service. In setting quantitative targets, management decides
what is important e.g. turn around time of services, the volume of complaints etc … (point 6). For investigatory work,
where the outcome is the delivery of a completed dossier which establishes no further action is needed, or, alternatively,
contains sufficient information to be taken forward by a prosecuting or disciplinary agency for further action, qualita-
tive targets are less clear-cut and can best be measured by customer satisfaction surveys (point 7).

6. The SC notes in particular that OLAF is ‘under pressure to decrease the average duration of cases’ (OLAF’s note dated
12/04/2006) and that the European Court of Auditors has recommended the establishment of a maximum duration for
enquiries (Para 80 of the ECA report).

In the context of the duration of cases the SC would recommend the measurement of the timeliness of procedures
whilst comparing individual cases against the standard time limits which management should fix.

Two generally accepted indicators in that respect are:

— the clearance rate

— and the backlog indicator.

Clearance rate: The clearance rate measures whether an organisation can keep up with its workload. It measures the
number of completed cases in the reporting period divided by the number of cases opened in the same period.

Backlog indicator: The backlog indicators allow the organisation to measure on the basis of the standards which man-
agement sets for timeliness the age of the caseload on the background of this efficiency standard.

20.5.2008

EN

Official Journal of the European Union

C 123/17

A good example in this context which OLAF could use mutatis mutandis as a model appears to be the Australian Fed-
eral Court which has decided earlier that:

— no more than 10 per cent of cases pending completion are to be more than 6 months old

— no cases pending completion are to be more than 24 months old.

7.

It is generally accepted that customers should be involved in standard setting and influence evaluation of quality
and assessments of service delivery.

In the SC’s view, OLAF should regularly survey the satisfaction of European institutions and national authorities
and invite these ‘customers’ to make proposals for any improvements which they might consider necessary.

The surveys could focus on

— the technical quality of work

— the relevance of the information provided

— and the timeliness of the information provided.

C 123/18

EN

Official Journal of the European Union

20.5.2008

ANNEX 4

OPINION No 1/2007

OLAF’s Reports of Investigations that have been in progress for more than nine months

Brussels, 25 April 2007

INTRODUCTION

The task of the Supervisory Committee

The Supervisory Committee of the European Antifraud Office (OLAF) reinforces OLAF’s independence by regular monitor-
ing of its investigative function. Within this task, the Committee also supervises the duration of OLAF’s investigations in
order to check that they are conducted continuously over a period proportionate to the circumstances and the complexity
of the case (1).

Therefore, where an investigation has been in progress for more than nine months, the Director-General of OLAF is obliged
to inform the Supervisory Committee of the reasons for which it was not possible to conclude it and of the expected time
for completion.

From the beginning of its term of office in December 2005 the newly elected Supervisory Committee has received monthly
summaries of the said investigations (henceforth ‘nine months reports’), which have been carefully examined as established
in its own rules of procedure (2).

The aim of this examination is to analyse the information provided by the Director General in order to assess the duration
of investigations and the reasons for potential undue delays. However, given that currently 75 % of the investigations opened
by OLAF have been in progress for more than nine months (3), this exercise has now taken on a different perspective. Exceed-
ing this period is not infrequent and, as a consequence, the nature of the ‘nine months reports’ as a warning system to con-
trol the length of investigations appears to have changed and lost its impact.

When examining the ‘nine months reports’ transmitted to the Committee two different aspects have been evaluated:

— The extent to which they contain adequate information to enable the Supervisory Committee to perform its monitor-

ing function, particularly with regard to the potential existence of undue delays,

— The extent to which they can be used as a management tool by OLAF in order to bring the investigation to a successful

conclusion within a proportionate period.

Methodology

Under the title ‘Information to the OLAF SC, cases open for more than nine months’, the Director General of OLAF has transmit-
ted to the Supervisory Committee monthly summaries of investigations containing the following main elements (4):

— Legal basis;

— Description of the case;

— Date of opening of the case;

— Financial economic impact;

(1) Article 6.5 of Regulation (EC) No 1073/1999.
(2) OJ L 33, 7.2.2007 Article 13.3 of the Rules of Procedure of the OLAF Supervisory Committee.
(3) Statistics extracted from the Case Management System (CMS).
(4) See annex 1.

20.5.2008

EN

Official Journal of the European Union

C 123/19

— Reasons for non completion of the case assigned to one (or more) of the following criteria: significant resources were
allocated but even so the volume of investigative work means that more time is needed; tactical hold in investigation;
lack of resources; low priority combined with limited resource allocation; lack of cooperation;

— Future steps;

— Expected time for completion.

On the basis of this information as provided by OLAF, the Supervisory Committee has endeavoured to identify the elements
which would allow the Committee to assess whether investigations are being conducted continuously over a period pro-
portionate to the circumstances and the complexity of the case as follows:

— The subject matter of the investigation, which is the legal description of the irregularity;

— Reference dates: the date or period on which the acts under investigation were executed, the date of receipt of the infor-

mation by OLAF, and the duration of the ‘assessment stage’ of the case prior to the opening decision;

— Potential sanctions or legal consequences of the acts under investigation: disciplinary, administrative, financial or crimi-

nal ones;

— Time barring periods of acts under investigation: both under national and community law regimes;

— The relevance of the reasons invoked for the non conclusion of the case;

— Justified expected time for completion.

OLAF’S REPORTS

For the purpose of delivering this opinion the Supervisory Committee has examined the ‘nine months reports’ sent by OLAF
covering the period from January to December 2006 which amounted to 150 investigations over all sectors, as follows: 19
internal investigations: European institutions, 9 internal/external investigations: EU bodies, 30 direct expenditure and exter-
nal aid, 21 external aid, 27 agriculture, 19 customs and 25 structural measures (1).

Taking into consideration the specific nature of each sector and the different procedural rules applicable to each, the analy-
sis was carried out using an approach by sector. However the aim is to reach global conclusions.

Internal investigations: European institutions

OLAF plays the lead role in these types of investigations and enjoys clear procedural competences (2).

It has been noted that the subject matter of the investigation which is the legal description of the irregularity has been men-
tioned only on very few occasions (3). In those cases the legal descriptions used are, variously, ‘a conflict of interest (Article 14
of the Staff Regulations)’, ‘a breach of Article 22 of the Staff Regulations and Article 57.2 of the Financial Regulation’ or ‘the
leaking of confidential information, Article 86, 2 of the Staff Regulations’ such description allowing the evaluation of the
relevance of the investigative measures taken and the proportionate duration of investigations.

Special attention has been paid to the consideration given to the time barring periods of the acts under investigation. How-
ever, neither the date of execution of those acts (4), nor the duration of the ‘assessment stage’ made by OLAF prior to the
decision to open an investigation is ever referred to although the date of receipt of the information by OLAF is sometimes
mentioned. Reference is never made to potential sanctions or legal consequences of the acts under investigation.

(1) See annex 2. The total amount of active investigations per sector in December 2006: 62 internal investigations: European institutions,
24 internal/external investigations: EU bodies, 69 direct expenditure and external aid, 49 external aid, 65 agriculture, 83 customs
and 52 structural measures.

(2) Article 4 of Regulation (EC) No 1073/1999.
(3) See annex 2: cases number 25, 24 and 125.
(4) See annex 2: only in case number 59 is there a reference to the period where acts under investigation could have been committed.

C 123/20

EN

Official Journal of the European Union

20.5.2008

The relevance of the reasons for the case not being concluded has been carefully examined; in general the reasons ticked in
the model report do not often correspond to those explained in the reports afterwards. Particular attention has been paid to
‘tactical hold in investigation’ as a reason frequently quoted. This reason is not clearly explained and justified; ‘operative rea-
sons’, the complexity of the case or lack of response from other services have been given as justifications for a ‘tactical hold’
approach frequently leading to long periods of inactivity (1). This sort of inactivity has also been detected in other
investigations (2).

It has equally been verified that the expected time for completion of investigations is given, however, without mention of
any specific details justifying the time proposed. This does not usually depend on the conduct of investigative actions by
OLAF, but on external factors.

Internal/external investigations: EU bodies

OLAF plays the lead role in these types of investigations (3).

It has been verified that the subject matter of the investigation, which is the legal description of the irregularity, is not always
mentioned.

The date of the receipt of information by OLAF is often referred to. Nevertheless, neither the date of the execution of the
acts under investigation nor the duration of the assessment period is mentioned. As a consequence, the potential sanctions
are not cited and the time barring periods are not mentioned in the ‘nine months reports’.

The most common reasons quoted for the case not being concluded are ‘low priority combined with lack of resources’ and
‘the volume of investigations’.

It should be noted that the expected time for completion is almost never mentioned (4).

Direct expenditure and external aid

OLAF has the lead role in this field where the rules for the conduct of investigations are also based ‘on the agreements in
force with third countries’ (5).

A systematic and detailed mention of the legal basis on which investigations are based has been observed. The subject mat-
ter of the investigations is clearly explained although the legal description of the irregularities concerned is not made. In this
context the potential sanctions or legal consequences of the irregularities are only mentioned where they are of a criminal
nature. In a few cases, reference is made to time barring periods (6).

As far as reference dates are concerned, notice of the date of receipt of information by OLAF is not always visible (7) in the
reports. Similarly neither the duration of the ‘assessment stage’ nor the date or period on which the acts under investigation
were executed appear.

Of particular note is ‘the volume of investigative work’ and ‘low priority combined with limited resource allocation’ as well
as ‘lack of resources’ as being the reasons commonly used for not having concluded investigations.

The expected time for completion is always mentioned and further steps to be taken in the investigations are well explained.

External aid

As mentioned in the previous sector, OLAF has the lead role in this field (8). It has been noted that there is not always a legal
reference to agreements with the third countries where investigations take place.

Long periods of ‘assessment stage’ prior to the decision to open investigations have been observed (9). The dates of the receipt
of information by OLAF are rightly mentioned. However, there is neither reference to the date of execution of the acts under
investigation nor to the potential sanctions or legal consequences. There is no allusion to the time barring periods in the
reports.

(1) See annex 2: cases number 20, 21, 22, 25, 59, and 101 inter alia.
(2) See annex 2: cases number 1, 2 and 101 inter alia.
(3) Article 3 of Regulation (EC) No 1073/1999.
(4) See annex 2: only in cases number 77 and 87.
(5) Article 3 of Regulation (EC) No 1073/1999 and ‘agreements in force with third countries’
(6) See annex 2: cases number 31 and 92.
(7) See annex 2: cases number 64, 92, 93, and 106 inter alia.
(8) Article 3 of Regulation (EC) No 1073/1999 and ‘agreements in force with third countries’.
(9) See annex 2: cases number 9, 27, 28, 29, and 120 inter alia.

20.5.2008

EN

Official Journal of the European Union

C 123/21

Particular attention has been paid to the reasons for investigations not having been concluded: reasons such as ‘tactical hold
in investigation’ and ‘the volume of investigative work’ often correspond to OLAF waiting for the completion of audits car-
ried out by external firms, without any active participation or close follow up by OLAF. The added value of OLAF’s work in
this field is not clear from the content of the ‘nine months reports’.

The expected time for completion is always indicated and clear further steps in the investigations are often listed.

Agriculture

OLAF has strong and well established legal powers to conduct investigations in this field (1). However, this sector also cov-
ers customs cases where agricultural products are involved and where OLAF plays primarily a co-ordination and assistance
role. Most of the ‘nine month reports’ transmitted to the Supervisory Committee belong to the latter category.

In the customs domain, the legal basis is usually well defined as is the legal description of the irregularity. However, there is
neither reference to the legal consequences of irregularities nor to the expiry of the time barring periods to take actions
against those who are evading payment of customs duties. Furthermore, the date of receipt of information by OLAF is sel-
dom referred to and the duration of the evaluation period is not reported.

It has been checked that often in these types of cases, several Member States are involved and do not respond in due time to
the request for assistance sent by OLAF. Although in many summaries the reason given for not having concluded the inves-
tigation is the ‘volume of investigative work’, this is often combined with ‘long delays in receiving a response from the Mem-
ber States’. It is possible that as a result of this, the expected time for completion is not always mentioned (2) and, when it is,
no clear justification is provided to explain the date specified.

In the pure agriculture investigations domain, it has been noted that the financial impact with regard to Community fund-
ing is sometimes not clearly identified in the ‘nine months reports’ (3). This then has an impact on the legal description of
the irregularity which is not mentioned nor is there mention made of the eventual administrative or criminal consequences.
There is also a lack of clear reference to the dates or period when the acts under investigation were executed and to the time
barring period.

Customs

OLAF plays a coordination and assistance role in this field and the duration of cases depends highly on the action of the
Member States or third countries involved. This is the reason consistently cited in the ‘nine months reports’ for the case not
having been wound up.

It has been more difficult to determine to what extent the ‘nine month’ period has been formulated for these types of cases,
given that it is the Member States’ ultimate responsibility.

It has been noted that the legal basis is well explained and the summary of the case is detailed and valuable. However, there
is neither reference to the dates on which the acts under investigation have taken place nor is mention made of time barring
periods.

It was also observed that the expected time for completion mentioned in the ‘nine months reports’ is also related to the steps
to be taken by the Member States.

Structural Measures

OLAF enjoys a solid basis for conducting investigations in this field (4). However, in many of the ‘nine month reports’ trans-
mitted, OLAF does not conduct an investigation but rather provides assistance to national judicial or administrative
authorities (5).

The subject matter of the investigation which is the legal description of the irregularity is mentioned. However there is no
clear overview of the Commission funding process specific to the Community budget for the case in question in the ‘nine
months reports’.

(1) Article 3 of Regulation (EC) No 1073/1999, Regulation (EC, Euratom) No 2988/95, Regulation (Euratom, EC) No 2185/96 and Regula-

tion (EC) No 515/97 inter alia.

(2) See annex 2: cases number 32, 33, 34, 35, and 36 inter alia.
(3) See annex 2: cases number 12, 36, and 70.
(4) Article 3 of Regulation (EC) No 1073/1999, Regulation (EC, Euratom) No 2988/95, Regulation (Euratom, EC) No 2185/96.
(5) See annex 2: cases number 41, 42, 55, 57, 75, and 112 inter alia.

C 123/22

EN

Official Journal of the European Union

20.5.2008

The date of receipt of information by OLAF is mentioned and reference is made to the ‘assessment stage’ in some cases,
although the date of the execution of acts under investigation is never mentioned.

Potential sanctions or legal consequences of the acts under investigation are not specifically referred to and the time barring
periods both under community law or national law regimes are never analysed notwithstanding the fact that in several inves-
tigations there are clear references to potential criminal offences (1).

‘Lack of resources’ or ‘volume of the investigative work’ are often quoted as reasons for the case not being concluded,
although some times they do not entirely correspond to those explained either in the reports afterwards or relate to specific
tasks of the investigators in this field (2).

In the area of provision of assistance to the national judicial authorities, the reason cited is ‘the nature of the case (criminal
assistance)’ (3).

The expected time for completion is usually determined although without mention of any specific details.

CONCLUSIONS AND RECOMMENDATIONS

The information currently contained in the ‘nine months reports’ sent to the Supervisory Committee is pertinent and useful.
Elements such as the description of the case, the steps taken, the financial impact and future steps proposed remain essential
to the understanding of the investigation under evaluation. However, on examination of the ‘nine months reports’, it has
become clear that crucial elements necessary for the Supervisory Committee to perform its monitoring task with regard to
the duration of investigations are missing. Moreover, the Supervisory Committee believes that incorporation of these ele-
ments into the ‘nine months reports’ will be also helpful for improving the management of the investigation in progress at
that stage of the case.

The monitoring function of the Supervisory Committee

— The current format of the ‘nine months report’ does not contain all relevant information necessary in order for the
Supervisory Committee to determine whether investigations are conducted continuously over a period proportionate
to the circumstances and the complexity of the case.

The format of the summary of the ‘nine months reports’ should change so as to incorporate supplementary elements which would
allow an efficient evaluation of the progress of investigations. These elements should include: the legal description of the irregu-
larity, the date or period on which the acts under investigation were executed, the duration of the ‘assessment stage’ prior to tak-
ing the decision to open the case, the potential sanctions or legal consequences of the acts under investigation and time-barring
periods for the acts under investigation.

— The lack of reference to time-barring periods in the ‘nine months reports’ does not allow the Supervisory Committee to

assess the proportionate duration of the steps taken and proposed for conducting investigations.

Time barring periods should be specifically highlighted and analysed in the summaries of the ‘nine months reports’.

— The information contained in the ‘nine months reports’ in some sectors is not sufficient to have a clear picture of the
aim of the investigations, the reasons for delays and their legal consequences. In particular, a reason such as ‘tactical
hold in investigation’ where an investigation has not been concluded is neither well justified nor explained in most cases.

Furthermore, frequent use of a reason such as ‘low priority combined with lack of resources’ could suppose a lack of a
clear investigation policy.

(1) See annex 2: case number 17.
(2) See annex 2: cases number 54 and 75.
(3) See annex 2: cases number 41, 55, 57 and 112.

20.5.2008

EN

Official Journal of the European Union

C 123/23

The term ‘tactical hold in investigation’ used in the ‘nine months reports’ should either be strictly defined or omitted. The use of
this reason for not having concluded an investigation should be prudent and precise.

Reflection on the implications of a reason such as ‘low priority combined with lack of resources’ is also recommended.

— The expected time for completion of investigations is not accurately reflected in the ‘nine months reports’. It is not men-

tioned in one third of the cases and when mentioned, it is never respected.

An indication as well as a reasoned explanation with regard to the expected time of completion is necessary. Future investigative
steps should be better outlined.

The management of OLAF’s investigations

— The ‘nine months reports’ transmitted to the Supervisory Committee is not longer a warning system with regard to the
length of investigations but rather a reporting exercise carried out at this stage of the case. A vast majority of OLAF’s
investigations have been in progress for a longer period. In many cases long periods of inactivity are detected. The
Supervisory Committee believes that the current ‘nine months report’ does not constitute a management tool for OLAF
aiming to re-examine the strategy of the investigation and to clarify its targets. That 75 % of investigations have been
open for over nine months is a strong indicator of the need of urgent managerial action to be taken.

The implementation of a management control system which would efficiently prevent stagnation of investigations is recommended.
Regular close scrutiny by the heads of Unit of the continuous progress of the investigation should then be appropriate.

FUTURE ACTION

Continued examination of the ‘nine months reports’ received from the Director General for the period 2007 will be carried
out by the Supervisory Committee. Further scrutiny will be made of the reasons for the non completion of investigations
within the specified time period and particular attention will be given to the cooperation from the Member States. The devel-
opment of a clear investigation policy and an improved case management system will also be followed closely by the
Committee.

It should be noted that OLAF’s quick reaction to improve the content of the ‘nine months reports’ following a meeting
between themselves and the Supervisory Committee (1) leads the Committee to anticipate an equally swift response to the
above mentioned recommendations. Incorporating the suggested changes as outlined would lay the ground for all future
examinations of the ‘nine months reports’ by the Supervisory Committee.

(1) See Note I/01068 05.02.07

C 123/24

EN

Official Journal of the European Union

20.5.2008

ANNEX 5

OPINION No 1/2006

OLAF’s Preliminary Draft Budget for 2007

The OLAF Supervisory Committee has discussed in its meetings dated 20/21 of March and 25/26 of April 2006 ‘OLAF’s
Preliminary Draft Budget for the European Anti-Fraud Office for 2007’ and adopted the following opinion:

Brussels, 28 April 2006

Opinion

OLAF’s preliminary draft budget 2007 is essentially a continuation of OLAF’s budget for 2006 with certain minor addi-
tional requests in order to cope with the enlargements (EUR 10, Bulgaria and Rumania).

In the area of human resources the Committee notes the high portion of temporary agents in comparison with the Com-
mission’s average and the high number of vacant posts which OLAF intends to reduce with the recruitment of temporary
agents from the reserve list of the ongoing selection and from EPSO reserve lists for permanent officials. The recruitment of
new officials will require additional efforts in training.

Stability and continuity of staffing is needed in the employment of temporary agents and OLAF envisages an overall balance
in a certain number of services, among them communication.

The Supervisory Committee requires that the allocation of posts for the secretariat of the OLAF Supervisory Committee be
reestablished according to the former level of the preceding budget.

OLAF is making efforts to satisfy all the needs of the Supervisory Committee and its secretariat in terms of human and finan-
cial resources to enable the Supervisory Committee to fulfil its legal mandate in full independence.

OLAF’s Director General has given the Supervisory Committee a firm and binding commitment to put at its disposal all the
human and financial resources the Supervisory Committee requires in order to comply with its legal mandate and its work-
ing program.

Under these circumstances the Supervisory Committee supports OLAF’s budget proposal.

OPINION No 2/2007

OLAF’s Preliminary Draft Budget for 2008

The OLAF Supervisory Committee (SC) has discussed in its meetings of the 24th and 25th April, 2007 ‘OLAF’s Preliminary
Draft Budget for the European Anti-Fraud Office for 2008’ and adopted the following opinion:

Brussels, 25 April 2007

a) Human resources management and investigation work

As regards the question of temporary agents, the SC welcomes the agreement recently reached with DG Admin and the staff
representatives anticipating a screening procedure to be conducted to award an extension for an unlimited period of the tem-
porary agents recruited before 1 February 2006. The agreement has been pivotal in ensuring continuity and maintenance of
OLAF in-house expertise and it is expected to improve the commitment of staff to OLAF objectives and the effectiveness of
OLAF as a whole.

20.5.2008

EN

Official Journal of the European Union

C 123/25

In order to fully benefit from the positive outcome of the agreement, the SC’s view is that a robust strategy in human
resources management is now urgently needed. OLAF should ensure that human resources management (and training) are
fully adapted to the needs of the organisation, and that the allocation of resources between Units reflects the priority needs.
Generally, human resources management should be seen as the key investigation support function to strengthening the effi-
ciency and effectiveness of the investigation work. Developing and maintaining a skilled, diverse and capable investigative
staff is the only way to improve the efficiency and quality of OLAF services and must be considered to be the principal source
of advantage for OLAF overall strategy.

Consequently, the SC believes that having a well-defined human resources strategy will help the Office to maximise the use
of existing resources in the investigation area to better manage the future workload and to organise the investigative teams
accordingly. This includes as a minimum, an advance planning of short-and medium term priority needs (based on strategic
analysis), overview of the existing resources and capabilities as well as identification of the areas where improvement is
needed. An important area in this respect is the provision of adequate and continuous training for investigators, which is a
key factor in increasing motivation and job satisfaction.

Recommendation: OLAF to prepare a human resources strategy to address short- and medium-term human resources matters (needs
assessment, recruitment, training, mobility and career development). A robust approach to human resources management will improve
the operational effectiveness.

b) Allocation of resources in the support of investigation work

OLAF is requesting 9 additional AD posts, of which two would be allocated to operational Units and the remaining to dif-
ferent administrative and policy tasks. The SC supports the allocation of resources to strengthen OLAF’s investigatory func-
tion but questions the need, without further evidence of pressing need, for further resources to supplement administrative
and policy areas which are not directly concerned in investigation activities, particularly since many OLAF investigation
teams are currently understaffed in relation to the size of their workload.

Secondly, the SC is aware that OLAF has not been able to fill the number of posts requested from the budgetary authorities
in previous years, and that there are currently a large number of posts unoccupied. As a priority, OLAF management should
undertake measures to fill those vacant posts before any additional posts are requested.

In the recent structural reorganisation, OLAF accorded clear priority to investigation work. If there is a pressing need for
OLAF to supplement its resources in certain areas of non-operational work, management should, as an alternative, consider
measures such as transfers, though not, of course, from operational areas, to deploy resources in these areas.

Recommendation: As a priority new posts should be allocated to OLAF operational work and non-operational posts should be filled
by internal transfers. This would reinforce the Office’s activities on its investigative function.

c) Secretariat staff

OLAF’s Director General has given the SC a firm and binding commitment to put at its disposal all the human and financial
resources the SC requires in order to comply with its legal mandate and its work programme. The SC would like OLAF to
make a provision in the 2008 Budget for eight Secretariat staff using the footnote method to earmark these posts specifi-
cally for the Secretariat as was done in the past. This would enable the SC to fulfil its legal mandate in full independence.

Recommendation: OLAF to add a footnote to the establishment plan concerning the earmarking the eight staff members of the
Secretariat

d) Conclusion

The SC supports OLAF’s budget proposal for 2008 with the proviso that the above recommendations be taken into
consideration.