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

5.12.2008

EN

Official Journal of the European Union

C 311/149

REPORT

on the annual accounts of the European Training Foundation for the
financial year 2007 together with the Foundation’s replies

(2008/C 311/22)

CONTENTS

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

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

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

Paragraph

1-2

3-6

7-8

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

The Foundation’s replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

150

150

150

151

155

C 311/150

EN

Official Journal of the European Union

5.12.2008

INTRODUCTION

The European Training Foundation (hereinafter called the
1.
Foundation) was
created by Council Regulation (EEC)
No 1360/90 (1). The Foundation’s purpose is to support the
reform of vocational training in the European Union’s partner
countries. As such, it assists the Commission in the implementa-
tion of various programmes (PHARE, TACIS, CARDS and MEDA).

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

STATEMENT OF ASSURANCE

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

4.
The Foundation’s accounts for the financial year ended
31 December 2007 (3) were drawn up by its Director, pursuant
to Article 11 of Regulation (EEC) No 1360/90, and sent to the
Court, which is required to deliver a Statement of Assurance on
the reliability and on the legality and regularity of the underlying
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.

The Court has obtained a reasonable basis for the State-

6.
ment set out below:

Reliability of the accounts

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

Legality and regularity of the underlying transactions

transactions underlying the Foundation’s

The
accounts, taken as a whole, are legal and regular.

annual

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

OBSERVATIONS

7.
The 2007 budget of the European Training Foundation
amounted to 21,1 million euro as compared with 26,5 million
euro the previous year. The budget is mainly financed by subsidy
from the Commission (19,7 million euro). The balance is financed
by assigned revenue for implementing Commission programmes.
The decrease in the budget is due on the one hand to a change in
the presentation of assigned revenue and on the other hand to the
phasing out of the ETE-MEDA programme.

8.
In the amending budget (5), the amount of the assigned
revenue is incorrect. It should have been 1,2 million euro instead
of the 3,4 million euro shown, which erroneously included
assigned revenue carried over from the previous year.

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) OJ L 131, 23.5.1990, p. 1.
(2) OJ L 248, 16.9.2002, p. 1.
(3) These accounts were drawn up on 18 June 2008 and received by the

Court on 1 July 2008.

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

(5) For 2007, the Foundation only approved one amending budget; it was

dards of Supreme Audit Institutions (ISSAI).

published on 4 January 2008 (OJ L 2, 4.1.2008).

Areas of Community
competence deriving from the
Treaty

The Community shall carry
out, within its spheres of
competence,
economic,
financial and technical coop-
eration measures with third
countries. Such measures
shall be complementary to
those carried out by the
Member States and consis-
tent with the development
policy of the Community.

(Article 181a of the Treaty)

Table 1

European Training Foundation (Turin)

Competences of the Foundation Council Regulation (EEC) No 1360/90

Governance

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

Products and services supplied during
the financial year 2007

Objectives

Tasks

1. Governing Board

Final budget

Activities

from the

— To contribute to the devel-
opment of the professional
training systems of Central
the
and Eastern Europe,
independent States of
the
former Soviet Union benefit-
ing
economic
reform and recovery assis-
tance programme, and the
territories
and Mediterra-
nean third countries benefit-
ing
and
from financial
technical
accompanying
measures for the reform of
their economic and social
structures.

— To promote the coordina-
tion of the assistance pro-
vided to eligible countries.

In accordance with the general
guidelines laid down by the Com-
munity, the ETF operates in the
field of training, covering profes-
sional, initial and lifelong training
and the retraining of young
people and adults via the follow-
ing tasks:

— Assistance in defining train-
ing needs
and priorities
through the implementation
of technical assistance mea-
sures in the training field and
cooperation with the appro-
priate designated bodies in
the eligible countries.

— Acts as a clearing house to
provide the Community, its
Member States and inter-
ested third countries with
information on current ini-
tiatives and future needs in
the training field and pro-
vides a framework for chan-
nelling offers of assistance.

21,1 (26,5) million euro of which 19,7
(19,5) million euro funded by a Com-
mission subsidy and 1,4 (7,0) million
euro funded by other bodies as assigned
revenue.

This sum of 1,4 million euro is divided
up as follows:

— 0,3 million euro from the Italian

Ministry of foreign affairs;

— 0,9 million euro DG EAC (Tem-

pus).

— 0,2 million euro from the Transla-

tions Centre.

Staff numbers as of 31 December
2007

— 100 (105) temporary posts in the
establishment plan, of which 91
(94) posts occupied.

— 40 (32) other staff (auxiliaries, local

agents, contract agents).

Total staff: 131 (126), assigned to the fol-
lowing duties:

— operational tasks: 72 (73)

— administrative tasks: 40 (34)

— mixed tasks: 19 (19).

— One representative of
each MemberState.

— Three representatives of
the Commission.

— Chaired by the Commis-

sion.

2. Director

— Appointed by the Gov-
erning Board on the
basis of a proposal from
the Commission

3. Advisory Forum

— Appointed by the Gov-

erning Board.

— Two experts from each

MemberState.

— Two experts from each

eligible country.

— Two experts from the
social partners at Euro-
pean level.

4. External audit

Court of Auditors.

5.

Internal audit

The Commission’s internal
audit department.

6. Discharge authority

Parliament acting on recom-
mendation from of the Coun-
cil.

(adult)

The assistance provided by the ETF
covers a large range of technical
fields including:
initial vocational
training, lifelong learning, continu-
ing
education, human
resources development in compa-
nies, employment policies, training
of the unemployed, poverty allevia-
tion and social inclusion, and train-
ing
local
development.

encourage

to

Support for the Commission:

In 2007, 115 new requests for sup-
port were received from the Com-
mission. Most came from the
delegations (40 %), EAR (17 %), DG
AIDCO (10 %), DG EAC and DG
ENTRE (9 %), DG EMPL (6 %), DG
ELARG (4 %), DG RELEX (3 %) and
DG JLS (3 %), This included 29
analyses of the situation in the ENPI
countries. The Commission’s satis-
faction rate with the ETF’s response
was 96 %.

frequent applications
The most
were those in the field of program-
ming (32 %), followed by policies
and contributions in the prepara-
tion of European Neighbourhood
Instruments (25 %), the identifica-
tion of projects (14 %) and follow-
up.

.

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Areas of Community
competence deriving from the
Treaty

Competences of the Foundation Council Regulation (EEC) No 1360/90

Governance

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

Products and services supplied during
the financial year 2007

Information and analysis: Coun-
try sector studies, statistics on edu-
cation, policy advice to countries.

Innovation and development
support projects

As a centre of expertise, the ETF
contributes towards the setting up
of development projects in order to
test innovative approaches allow-
ing partner countries to carry out
reforms of
their education and
vocational training systems.

Technical assistance to DG EAC
for the implementation of the
Tempus Programme: Assistance
Conventions with CARDS, MEDA
and Tacis for the Tempus pro-
gramme.

management

This assistance covers the whole
cycle of the project. It includes the
selection,
and
follow-up of contracts and infor-
mation
communications,
including general administrative
support.

and

Source:

Information provided by the Foundation.

IT tools such as online applications
and report forms have greatly facili-
tated the administrative manage-
ment of the various project cycles.

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European Training Foundation (Turin) — Budgetary implementation for the financial year 2007

Table 2

Origin of revenue

Revenue

Revenue entered in the
final budget for the
financial year

Revenue collected

Allocation of expenditure

Expenditure

Appropriations for the financial year

(1 000 euro)

Appropriations carried over from the previous
financial year

entered

committed

paid

carried over

cancelled

available

paid

carried over

cancelled

Community subsidies

19 700

19 450

Other revenue

183

188

Title I
Staff (NDA)

Title II
Administration (NDA)

Title III
Operating activites (DA)

13 819

12 795

11 787

1 008

1 024

562

439

1 745

1 592

1 128

464

153

437

361

Assigned revenue Italian
government

Assigned revenue ETE-
MEDA

Assigned revenue TEM-
PUS

300

0

870

— CA

4 319

3 794

— PA

4 319

3 556

17

300

Assigned revenue Italian gov-
ernment

300

209

115

185

0

Assigned revenue ETE-MEDA

0

0

0

0

525

746

0

0

0

0

485

111

374

3 131

1 106

2 025

Total

21 053

20 547

Total PA 21 053

16 918

609

Assigned revenue TEMPUS

870

455

332

Total CA 21 053

18 845

277

1 934

1 951

261

1 963

2 184

864

5 479

5 479

512

2 529

2 529

352

2 751

2 751

NDA: non-differentiated appropriations (commitment appropriations are equal to payment appropriations).
differentiated appropriations (commitment appropriations may differ from payment appropriations).
DA:
commitment appropriations in a system of differentiated appropriations.
CA:
PA:
payment appropriations in a system of differentiated appropriations.
NB: For assigned revenue the amounts given for the revenue entered in the budget and the expenditure appropriations are the corrected amounts (see paragraph 8 of the present report).
Source: Data supplied by the Foundation. This table summarises the data provided by the Foundation in its annual accounts. Revenue collected and payments are estimated on a cash basis.

0

0

0

123

76

0

0

0

0

199

199

.

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C 311/154

EN

Official Journal of the European Union

5.12.2008

European Training Foundation (Turin) — Economic outturn account for the financial years 2007 and 2006

Table 3

Operating revenue

Commission subsidy

CDT — reimbursement

Miscellaneous

Assigned revenue

Operating expenses

Staff expenses

Fixed asset related expenses

Operational expenses

Other administrative expenses

Operational expenses — assigned revenue

Total (a)

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

Total (b)

Financial operations revenue (e)

Financial operations expense (f)

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

(1 000 euro)

2007

2006

17 572

183

33

2 250

20 038

12 101

336

2 980

2 720

2 250

20 387

– 349

0

0

0

16 015

0

36

3 183

19 234

11 539

358

4 021

2 580

3 183

21 681

– 2 447

0

1

– 1

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

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

– 349

– 2 448

European Training Foundation (Turin) — Balance sheet at 31 December 2007 and 2006

Table 4

Non current assets

Intangible fixed assets

Tangible fixed assets

Current assets

Stocks

Short-term pre-financing

Short-term receivables

Cash and cash equivalents

Non current liabilities

Provisions for risks and charges

Current liabilities

Provision for untaken leave

Accounts payable

Reserve

Accumulated surplus/deficit

Economic result for the year

2007

2 882

265

26

857

517

12 806

17 353

1 001

155

15 324

16 480

873

1 222

– 349

873

(1 000 euro)

2006

3 053

311

34

1 169

339

12 157

17 063

550

157

15 134

15 841

1 222

3 670

– 2 448

1 222

Total assets

Total liabilities

Net assets

Net capital

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

5.12.2008

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Official Journal of the European Union

C 311/155

THE FOUNDATION’S REPLIES

ETF confirms the facts presented in the Court’s observation. For precision, ETF would like to add that in
7.
addition to Commission programmes, the assigned revenue contains as well funds from the Italian Ministry of
Foreign Affairs.

8.
ETF takes note of the Court’s observation. While at no stage the principle of transparency has been dis-
respected, further efforts will be made to align ETF’s budget presentation practices with regulatory requirements.