Report on the annual accounts of the European Food Safety Authority for the financial year 2007 together with the Authority's replies
Date: 2008-09-18
Institutions: European Court of Auditors
Subjects: European Court of Auditors, European Food Safety Authority, administration of the Institutions, financial control, implementation of the budget, powers of the institutions (EU), report

C 311/100

EN

Official Journal of the European Union

5.12.2008

REPORT

on the annual accounts of the European Food Safety Authority for the
financial year 2007 together with the Authority’s replies

(2008/C 311/15)

CONTENTS

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

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

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

Paragraph

1-2

3-6

7-11

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

The Authority’s replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

101

101

101

103

106

5.12.2008

EN

Official Journal of the European Union

C 311/101

INTRODUCTION

The Court has thus obtained a reasonable basis for the

6.
Statement set out below:

1.
The European Food Safety Authority (hereinafter referred
to as ‘the Authority’) was established by Regulation (EC)
No 178/2002 of the European Parliament and of the Council of
28 January 2002 (1). Its main tasks are to supply the scientific
information needed for Community legislation to be drawn up,
to collect and analyse data that allow risks to be identified and
monitored and to provide independent information on these
risks.

2.
Table 1 summarises the Authority’s competences and
activities. Key data summarised from the financial statements
drawn up by the Authority for the financial year 2007 are pre-
sented in Tables 2, 3 and 4 for information purposes.

Reliability of the accounts

The Authority’s accounts for the financial year ended
31 December 2007 are, in all material respects, reliable.

Legality and regularity of the underlying transactions

The transactions underlying the Authority’s annual accounts,
taken as a whole, are legal and regular.

The observations which follow do not call the Court’s State-
ment into question.

STATEMENT OF ASSURANCE

OBSERVATIONS

This Statement is addressed to the European Parliament
3.
and the Council in accordance with Article 185(2) of Council
Regulation (EC, Euratom) No 1605/2002 (2); it was drawn up fol-
lowing an examination of the Authority’s accounts, as required by
Article 248 of the Treaty establishing the European Community.

7.
The Authority’s 2007 budget amounted to 52,2 million
euro as compared to 40,2 million euro for the previous year. It
included contributions from the Commission to prepare the
accession of Croatia and Turkey. These contributions should have
been treated as assigned revenue in the budget but were instead
treated as if they were part of the normal Community subsidy.
This situation was in contradiction of Article 19 of the Financial
Regulation.

The Authority’s accounts for the financial year ended
4.
31 December 2007 (3) were drawn up by its Executive Director,
pursuant to Article 44 of Regulation (EC) No 178/2002, and sent
to the Court, which is required to give a Statement of Assurance
on their reliability and on the legality and regularity of the under-
lying transactions.

5.
The Court conducted its audit in accordance with the IFAC
and ISSAI (4) International Auditing Standards and Codes of Eth-
ics, in so far as these are applicable in the European Community
context. The audit was planned and performed to obtain reason-
able assurance that the accounts are reliable and that the under-
lying transactions are legal and regular.

8.
Appropriations amounting to 8,6 million euro were car-
ried over to 2008 and 4,8 million euro were cancelled. This situ-
ation was partly due to the delayed adoption and implementation
of the 2007 annual work programme for grants. The appropria-
tions carried over from the preceding year amounted to 7,9 mil-
lion euro, of which 4,5 million euro were for operating activities
(Title III). Over 25 % of the appropriations for operating activities
carried over from last year had to be cancelled by the year end.
The situations described above were at odds with the principle of
annuality and showed weaknesses in the programming and the
budgeting of planned activities.

(1) OJ L 31, 1.2.2002, p. 1.
(2) OJ L 248, 16.9.2002, p. 1.
(3) These accounts were drawn up on 25 June 2008 and received by the

Court on 1 July 2008.

(4) International Federation of Accountants (IFAC) and International Stan-

dards of Supreme Audit Institutions (ISSAI).

9.
In 2007, the Authority was able to achieve its recruitment
objectives and fill 273 of the 300 posts in its establishment plan.
The audit of the recruitment procedures showed that in general
neither the weightings of the selection criteria to be applied nor
the threshold scores for going on to the next stage of the com-
petitions had been decided upon by the selection board before the
deadline fixed in the vacancy notice.

C 311/102

EN

Official Journal of the European Union

5.12.2008

According to the annual exception report for 2007, 252
10.
exception requests with a total value of 853 154 euro were
accepted. Over 85 % of the exceptions were related to mission
costs of national experts. This situation shows that the Authority
should improve its mission management in order to decrease the
volume of exceptions.

11.
irregularities were observed:

With regard to procurement procedures, the following
financial evaluation procedure

for framework contracts not clearly specified in the tender docu-
ments (1); award of specific contracts and/or purchase orders for
services not covered by the relevant framework contracts (2);
technical evaluations based on quality criteria and weightings not
clearly explained in the tender documents (3). These weaknesses
undermined the transparency of the procedure and risked bias-
ing the final selection.

This report was adopted by the Court of Auditors in Luxembourg at
18 September 2008.

its meeting of

For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President

(1) Four cases.
(2) Two cases.
(3) One case.

Areas of Community competence
deriving from the Treaty

Competences of the Authority (Regulation (EC) No 178/2002
of the European Parliament and of the Council)

Governance

Resources made available to the
Authority in 2007
(Data for 2006)

Products and services supplied

Table 1

European Food Safety Authority (Parma)

.

.

5
1
2
2
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Free movement of goods

Objectives

Tasks

1. Management board

Budget

(Article 37 of the Treaty)

Contribution to a high level of
protection of health, safety
and protection of the environ-
ment and of consumers, tak-
ing account of
any new
development based on scien-
tific facts.

(Article 95 of the Treaty)

Common trade policy

(Article 133 of the Treaty)

Public health

(Article 152(4)(b) of the Treaty)

— To

provide

scientific
opinions and scientific
and technical support for
the legislation and poli-
cies which have a direct
or
impact on
food and feed safety.

indirect

— To provide independent
risks

information
relating to food safety.

on

— To contribute

to the
achievement of a high
level of protection of
human life and health.

— To collect and analyse
data needed to allow
characterisation
and
monitoring of risks.

Source:

Information supplied by the Authority.

52,2 (40) million euro of which
Community subvention 100 %
(100 %)

Staff at 31 December 2007

300 (250) posts foreseen in the
establishment plan

of which occupied: 273 (173)

+ 37 (55) other staff (auxilliary,
contractuals, END)

Total staff: 310 (228)

of which for:

— Operational

duties:

218 (149)

— Administrative
92 (79)

duties:

— To issue scientific opin-

Composition

ions and studies.

— To

promote

uniform
risk-assessment method-
ologies.

— To assist
sion.

the Commis-

14 members appointed by the
Council
(in cooperation with the
European Parliament and the Com-
mission) and one representative of
the Commission.

Duties

— To search analyse and
summarise the requisite
scientific and technical
data.

— To adopt

the work pro-
gramme and the budget and
ensure that they are imple-
mented.

— To identify and charac-
terise emerging risks.

— To establish a network of
organisations operating
in similar fields.

— To provide scientific and
technical assistance
in
crisis management.

2. Executive director

Appointed by the Management
Board on the basis of a list of candi-
dates proposed by the Commission,
following a hearing before the Euro-
pean Parliament.

3. Advisory forum

— To improve international

cooperation.

Composition

— To provide the public and
interested parties with
reliable, objective
and
easily
comprehensible
information.

— To take part in the Com-
mission’s rapid alert sys-
tem.

One representative per Member
State.

Duties

— To advise the Executive Direc-

tor.

4. Scientific Committee and sci-
entific panels

To draw up the Authority’s scientific
opinions.

5. External audit

Court of Auditors.

6. Discharge authority

Parliament acting on recommenda-
tion of the Council.

1.
EFSA, as Europe’s risk assessment body, provides the scientific
advice on which risk managers in the European Union can base their
decisions to protect consumers in the EU. In this regard, following the
205 requests for scientific opinions made to EFSA in 2007, 203 opin-
ions and 80 reports were adopted and published. An example of the
impact of the EFSA’s scientific work is the opinion issued in July 2007,
concluding that the colouring Red 2G raised safety concerns. This led
to the immediate suspension of its use in food.

2. The overall objective of EFSA’s communication efforts is to pro-
vide its target audiences and ultimately European consumers with
clear, consistent, coherent and timely messages about food-related
issue. The communication main tools used and the results obtained in
2007 were:

— the new website with 1,5 million visits, over 17 500 subscribers
to the EFSA’s electronic newsletter and 1 500 viewing sessions
per event regarding the webstreaming of management Boards
meetings;

— the EFSA’s press office with 7 press conferences organised, 24
press releases and statements, 39 web news stories and 37 news
alerts were published;

— the celebration of EFSA’s Five-year Anniversary and the 50th
Anniversary of the Treaty of Rome provided EFSA with the
opportunity to use new communication platforms resulting in
scientific forums, food safety summit and joint events with
Member States.

Cooperation between Member States and EFSA is key to the overall
success of the European food safety system and to increasing con-
sumer confidence. The Advisory Forum connects EFSA with the
national food safety authorities in all Member States. The Advisory
Forum met quarterly in 2007. As a part of the cooperation strategy, a
network of national ‘Focal Points’ serves as a relay contact between
EFSA and national authorities. At the end of 2007, 18 Member States
had already signed a national Focal Point agreement with EFSA.

To make sure that EFSA is prepared to react and support the European
Community, in particular the EC, during emergencies or other urgent
situations, a crisis exercises programme has started on October 2007
and the first Crisis Exercise has been performed in January 2008 (with
the Advisory Forum) in order to finalise the crisis manual.

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European Food Safety Authority (Parma) — Implementation of the budget for the financial year 2007

Table 2

Source of revenue

Revenue

Revenue entered in the
final budget for the
financial year

Revenue collected

Allocation of expenditure

Community subsidies

52 207

48 193

Other revenue

p.m.

28

Assigned revenue (1)

Total

p.m.

52 207

129

48 350

Title I
Staff

Title II
Administration

Title III
Operating activities

Assigned revenue

Expenditure

Final budget appropriations

(1 000 euro)

Appropriations carried over from
previous financial year(s)

entered

committed

paid

carried
over

cancelled

entered

paid

cancelled

24 060

22 975

22 297

678

1 085

483

315

9 347

9 147

6 759

2 388

200

2 894

2 732

168

162

18 800

15 265

9 735

5 530

3 535

4 512

3 353

1 159

—

129

129

—

0

—

—

—

Total

52 207

47 517

38 920

8 596

4 820

7 889

6 400

1 489

(1) Reimbursement from the European Translation Centre. The amount reimbursed has been used for translation-related expenses.
N.B.: Variations in totals are due to the effects of rounding.
Source: Data supplied by the Authority. This table summarises the data provided by the Authority in its annual accounts. Revenue collected and payments are estimated on a cash basis.

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5.12.2008

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Official Journal of the European Union

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European Food Safety Authority (Parma) — Economic outturn account for the financial years 2007 and 2006

Table 3

(1 000 euro)

2007

2006

Operating revenue

Community subsidies

Other revenue

Operating expenditure

Staff expenditure

Fixed asset related expenditure

Other administrative expenditure

Operational expenditure

46 202

27

Total (a)

46 229

20 475

1 005

9 690

13 144

44 314

1 915

1

3

– 2

1 913

35 117

23

35 140

16 014

771

8 303

8 950

34 038

1 102

3

4

– 1

1 101

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

Total (b)

Financial operations revenue (e)

Financial operations expenditure (f)

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

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

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

drawn up on an accrual basis.

European Food Safety Authority (Parma) — Balance sheet at 31 December 2007 and 2006

Table 4

Non-current assets

Intangible fixed assets

Tangible fixed assets

Current assets

Short-term pre-financing

Short-term receivables

Other receivables

Cash and cash equivalents

Current liabilities

Provision for risks and charges

Accounts payable

Net assets

Reserve

Accumulated surplus/deficit

Economic result for the year

(1 000 euro)

2007

2006

962

1 789

354

97

478

11 308

14 988

523

7 767

8 290

6 698

4 785

1 913

6 698

687

950

224

43

112

10 607

12 624

388

7 451

7 839

4 785

3 684

1 101

4 785

Total assets

Total liabilities

Net capital

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

drawn up on an accrual basis.

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Official Journal of the European Union

5.12.2008

THE AUTHORITY’S REPLIES

Since 2008, all new projects for which the Authority receives specific contributions from the Commis-

7.
sion, are registered and monitored on assigned revenue budget lines (C4).

8.
The year 2007 was the first year in which scientific grants were launched. Several measures were taken,
in 2008 such as: early planning of the calls, templates, vademecum and additional administrative support to
accelerate the launch of grant calls. At the same time the planning of 2009 grant calls is on the way, with the
view to launch some of them already in the autumn 2008. With the new procedures relating to the processing
of carry-forward and in compliance with the principle of annuality, the 2007 carry-forward rate (17 % of final
budget) decreased by comparison to 2006 rate (22 %) but efforts will continue to be given to this area in 2008.

9.
Weightings for all selection criteria and threshold scores for passing to the next evaluation step and/or
to be put on the reserve list are decided upon by the Selection Board in a pre-evaluation meeting which takes
place after the deadline for application for the vacancy. However, no access is granted to the application data
base before the weightings are decided. The high fluctuation of number of applications received makes it dif-
ficult to define in advance the number of candidates to be put on the reserve list.

10.

Exception requests are closely monitored and reported.

The high value of exception requests (705 169 euro i.e. 83 % of the total value) is due to ‘a posteriori commit-
ments’ mostly related to scientific contracts for one specific unit where organisational changes have been
implemented since then.

11.

1. The observations regarding the financial evaluation procedure for framework contracts are related to three
tender procedures launched in 2005 and 2006 and to a framework contract signed in 2007. In the future,
the evaluation of financial offers for fixed price contracts will be based on a comparable basis. So far only
500 000 euro have been committed for this type of services.

2. The specific orders for the relevant services were not explicitly mentioned in the framework contract but
related to its field (events organisation). For future framework contracts efforts will be made to have a com-
plete description of possible services.

3. The weightings and quality criteria were explained in the tender document but not the sub-weightings of
the sub-criteria. Therefore, even if the call was considered as transparent enough, the procedures will be
strengthened in the future in order to address these comments.