Report on the annual accounts of the European Police College for the financial year 2007 together with the College's replies
Date: 2008-10-09
Institutions: European Court of Auditors
Subjects: CEPOL, European Court of Auditors, administration of the Institutions, financial control, implementation of the budget, powers of the institutions (EU), report

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Official Journal of the European Union

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on the annual accounts of the European Police College for the financial
year 2007 together with the College’s replies

REPORT

(2008/C 311/20)

CONTENTS

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

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

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

Paragraph

1-2

3-6

7-15

Tables 1 to 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The College’s replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

137

137

137

139

141

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INTRODUCTION

1.
The European Police College (hereinafter called the Col-
lege) was established by Council Decision 2000/820/JHA, as
repealed in 2005 and replaced by Council Decision
2005/681/JHA (1). The College’s task is to function as a network
and bring together the national police training institutes in the
Member States to provide training sessions, based on common
standards, for senior police officers.

Legality and regularity of the underlying transactions

Except for the situations described in paragraphs 14 and 15,
the transactions underlying the College’s annual accounts,
taken as a whole, are legal and regular. Furthermore, the Court
draws attention to the observation in paragraph 13.

2.
Table 1 summarises the College’s competences and activi-
ties. Key data taken from the financial statements drawn up by the
College for the financial year 2007 are presented in Tables 2
and 3for information purposes.

OBSERVATIONS

STATEMENT OF ASSURANCE

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 of 25 June 2002 (2); it
was drawn up following an examination of the College’s accounts,
as required by Article 248 of the Treaty establishing the European
Community.

4.
The College’s accounts for the financial year ended
31 December 2007 (3) were drawn up by its Director, pursuant
to Article 11 of Council Decision 2005/681/JHA, 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 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 thus obtained a reasonable basis for the

6.
Statement set out below:

Reliability of the accounts

Except for the situation described in paragraphs 9 and 10, the
College’s accounts for the financial year ended 31 Decem-
ber 2007 are, in all material respects, reliable. Furthermore,
the Court draws attention to the observation in paragraph 7.

(1) OJ L 256, 1.10.2005, p. 63.
(2) OJ L 248, 16.9.2002, p. 1.
(3) These accounts were drawn up on 31 July 2008 and received by the

Court on 30 September 2008.

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

7.
The 2007 College’s budget amounted to 6,5 million euro,
as compared to 5,1 million euro the previous year. The increase
in the budget was due to the expansion of the College’s activities.
This budget amount did not include a contribution of 1,5 million
euro received from the Commission in 2007 to implement a
MEDA (5) programme. This situation was at odds with the prin-
ciple of unity and accuracy of the budget.

8.
Only 5,6 million euro of the 2007 commitment appro-
priations (6) were used, of which 1,7 million euro were carried
over. More than 20 % (0,5 million euro) of the appropriations
carried over from the preceding year were cancelled. The high
level of carry-overs and cancellations of appropriations shows dif-
ficulties in budget management.

As in 2006, the College did not have, for most of the year,
9.
a proper commitment accounting system. For example, for oper-
ating expenditure, decisions to spend were taken by the Director
on the advice of the Governing Board. Commitments were only
recorded against budget lines after payments had been made. The
absence of internal control standards (7) and ineffective budget
monitoring led to spending in excess of the amount foreseen on
some budgetary lines. This then led to either ex-post transfers to
correct the overdrawn positions or the creation of new budget-
ary lines ex nihilo.

In November 2007, a commitment accounting system
10.
was put in place for operating activities. It explicitly provided for
the creation of budgetary commitments before any legal commit-
ment or any check on the availability of appropriations. The form
of the standard legal commitment in this new procedure does not
provide sufficient legal guarantees. It consists of a simple sheet
providing some administrative information on the project plus a
breakdown of its total cost between the relevant budgetary lines.
No contractual conditions are detailed. This approach is not in
line with the principle of transparency.

(5) The Euro-Mediterranean Partnership.
(6) Assigned revenue not included.
(7) Internal control standards were adopted by the Governing Board on

dards of Supreme Audit Institutions (ISSAI).

28 November 2007.

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Contrary to the College’s Financial Regulation (1), neither
11.
the provisional accounts nor the report on the budgetary and
financial management had been prepared.

12.
The recoverable VAT for the 2007 financial year,
amounting to 102 281 euro, had not been reclaimed by the year
end. VAT should be recovered at regular intervals during the year.
This situation is not consistent with sound financial management.

The College’s Financial Regulation foresees the need for
13.
detailed rules for the implementation (2) of the regulation. The
College has not yet adopted any detailed implementing rules,
including those ensuring the transparency of the College’s pro-
curement procedures. This had already been commented on in
the 2006 audit report (3).

The system of procurement did not comply with the pro-
14.
visions of the Financial Regulation. There was no documentation
available to justify the need to purchase particular items and to
explain recourse to a particular supplier. This had already been
commented on in the 2006 audit report (4).

15.
Cases were identified where appropriations were used to
finance the private expenditure of some of the College’s staff. As
it was not feasible for the auditors to review all payments made
during the year it is not possible to quantify either the amount
that was irregularly spent on private use or all the different types
of private expenditure made. This use of public funds for private
purposes is material by nature. Steps should be taken to ensure
complete reimbursement of these funds.

This report was adopted by the Court of Auditors in Luxembourg at
9 October 2008.

its meeting of

For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President

(1) Articles 76 and 82.
(2) For example, in Article 10(3), Article 34 and Article 74.
(3) Paragraph 8.

(4) Paragraph 11.

Areas of Community
Competence deriving from
the Treaty

Competences of the College as defined in Council Decision 2005/681/JHA

Governance

Resources made available to the College
in 2007
(data for 2006)

Main products and services supplied in
2007

Table 1

European Police College (Bramshill)

Approximation of laws

Objectives

Tasks

1. Governing Board

Final budget:

Treaty on European Union,
in particular Article 30(1)
and Article 34(2) thereof.

The aim of CEPOL shall be to help
train senior police officers in the
Member States by optimising
cooperation between CEPOL’s
various components. It shall sup-
port and develop a European
approach to the main problems
facing Member States in the fight
against crime, crime prevention
and the maintenance of law and
order and public security, in par-
ticular the cross-border dimen-
sions of those problems.

— To increase knowledge of

the
national police systems and struc-
tures of other Member States and
of cross-border police cooperation
within the European Union.

— To improve knowledge of interna-
tional and Union instruments, par-
ticularly in the following sectors.

(a)

(b)

the institutions of the Euro-
pean Union, their functioning
and role, as well as
the
decision-making mechanisms
and legal instruments of the
European Union, in particular
as regards their implications
for
law-enforcement coop-
eration;

Europol’s objectives, structure
and functioning, as well as
ways to maximise coopera-
tion between Europol and rel-
evant
law-enforcement
services in the Member States
in the fight against organised
crime;

(c)

Eurojust’s objectives, struc-
ture and functioning;

Composed of:

7,4 million Euro (5,0)

(100 % Community subsidy)

Staff at 31 December 2007:

Number of posts in the Establish-
ment Plan: 22,5 (22,5)

Posts occupied: 12 (7)

Other posts:
onded national experts, etc.: 9 (8)

(contract staff, sec-

Total staff: 21 (15)

One delegation from each
MemberState.

Each delegation shall have
one vote. Representatives of
the European Commission
and of the General Secretariat
of the Council of the Euro-
pean Union and Europol
shall be invited to attend
meetings
non-voting
as
observers.

2. Director

the Agency,

Manages
is
appointed and removed by
the Governing Board.

3. External audit

Court of Auditors.

4.

Internal Auditor

Internal Audit service of the
Commission.

— To provide appropriate training
with regard to respect for demo-
cratic safeguards, with particular
reference to the rights of defence.

5. Discharge authority

Parliament acting on a rec-
ommendation
from the
Council.

Source:

Information supplied by the College.

1.

Courses, seminars and confer-
ences: 85 conferences

2.

Training and research:

— 2 working groups
involving

for
training
49
tutors from all the Member
States.

— Recommendation

on
trainers and course stan-
dards has been adopted.

— European approach for
police science adopted.

— Reference groups for the
for
been

and
have

e-Network
E-learning
established.

— e-doc

database
and
CEPOL’s
glossary have
continued to be developed.

3.

External relations:

— Agreements signed with
and

Frontex

Eurojust,
Europol.

— Organisation of two spe-
cific activities for candidate
countries.

— Launch of the Euromed II

project

— Preliminary contacts initi-
ated for cooperation with
international (OSCE, Inter-
pol) and national organisa-
(Russia, European
tions
Neighbourhood
Policy
countries).

.

.

5
1
2
2
0
0
8

E
N

O

f
f
i
c
i
a
l

J
o
u
r
n
a
l

o
f

t
h
e

E
u
r
o
p
e
a
n
U
n
o
n

i

C
3
1
1
/
1
3
9

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European Police College (Bramshill) — Economic outturn account for the financial year 2007 and 2006

Table 2

Operating revenue

Community subsidies

Operating expenditure

Staff expenditure

Other administrative expenditure

Operational expenditure

Total (a)

Total (b)

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

Financial operations revenue (d)

Financial operations expenditure (e)

Surplus/(deficit) from non-operating activities (f = d + e)

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

Source: Data supplied by the College.

(1 000 euro)

2007

2006

7 165

7 165

1 954

213

4 009

6 176

989

—

– 18

– 18

971

4 352

4 352

1 460

358

2 454

4 272

80

—

– 12

– 12

68

European Police College (Bramshill) — Balance Sheet at 31 December 2007 and 2006

Table 3

(1 000 euro)

2007

2006

Non-current assets

Intangible fixed assets

Tangible fixed assets

Long-term receivables

Current assets

Short-term receivables

Cash and cash equivalents

Non-current liabilities

Long-term liabilities

Current liabilities

Accounts payable

Reserve

Accumulated surplus/deficit

Economic result for the year

8

139

102

182

4 586

5 017

1 190

2 788

3 978

1 039

68

971

Total assets

Total liabilities

Net assets

Total net assets

1 039

—

37

—

298

3 682

4 017

—

3 949

3 949

68

—

68

68

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

up on an accrual basis.

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THE COLLEGE’S REPLIES

7.

The specific MEDA project was not initially included in the Budget Out-turn Report.

Three separate entities were set up; CEPOL, AGIS and MEDA.

The income and expenditure for each entity was correctly recorded in the accounts as of 31 December 2007.

8.

The four main reasons the budget appropriations were not fully used are:

1. The number of participants in CEPOL activities was less than estimated and a few activities were

cancelled.

2. The recruitment process for new staff has taken longer time than estimated.

3. The new office accommodation, to be provided by NPIA, Bramshill in autumn 2007 was not avail-

able in 2007.

4. The cost for organising CEPOL activities were less than calculated due to cost effective solutions by

organisers of the activities.

9.
CEPOL did not have an accounting system in place in 2007 which complied with the Financial Regu-
lation. A paper-based system for commitments and segregation of duties was established in December 2007
and came into force on 1 January 2008. ABAC was implemented in June 2008. New budget lines were used
as a temporary measure. Internal procedures have been reviewed and amended to ensure the observed errors
will not recur.

10.
In November 2007 CEPOL Governing Board approved a system with Agreements between the
National Colleges/Institutes and CEPOL, which came into force 1 January 2008, and which will be further
amended in order to optimise the transparency of the agreements concluded with the colleges/institutes. A pro-
posal is tabled to the Governing Board in September.

11.
The draft 2007 Financial Statements were not prepared on 1 March, as specified in the Financial Regu-
lation. The Consolidated Reporting Package was prepared and finalised in accordance with the Financial Regu-
lation and sent to the Accounting Officer of the Commission by 18 January 2008.

Following the procedures of previous years, the VAT of the fourth quarter was recovered in the first

12.
quarter of the following year. VAT for 2007 has now been recovered.

The Implementing Rules of the Financial Regulation were adopted by the Governing Board in Febru-

13.
ary 2008. Internal Procurement Guidelines is adopted in September 2008.

The purchase of ICT equipment was done under the ‘Catalyst Framework Agreement’ and followed
14.
the conditions as provided by UK Home Office in 2004 to CEPOL when CEPOL did not have legal personality,
following the start up phase of CEPOL in 2004.

Cost regarding use of mobile phones and use of the CEPOL pool cars have been recovered. The recov-
15.
ery of the taxi/transport costs has been initiated. In order to follow up the use of CEPOL funds, an ex post con-
trol will be carried out by an external company, regarding the recovery of the costs.