Communication from the Commission to the Council and the European Parliament - The Commission's ex-Economat off budget bank accounts
Date: 2008-11-12
Institutions: European Commission
Subjects: European Commission, European accounting system, European official, account, investment project, profit, retail outlet

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 12.11.2008 
COM(2008) 692 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

The Commission's ex-Economat off budget bank accounts 

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COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

The Commission's ex-Economat off budget bank accounts 

1. 

INTRODUCTION 

Until  the  year  2000,  the  accounts  of  the  staff  shop  (henceforth  "Economat")  were 
managed outside the budget and the accounts used were held in a private bank. The 
operation  of  the  Economat  was  overseen  by  the  CPRE  "Commission  Paritaire  - 
Restaurants  et  Economats".  Ordinary  budget  lines  and  the  budgetary  accounting 
systems of those years were deemed to be ill-suited to the financial management of a 
revenue-generating  structure  with  daily  ordering,  delivery,  paying  and  recovery 
operations. 

Over  the  years,  the  Economat  showed  an  operating  surplus,  which  accrued  on  the 
bank accounts, also because, especially in the beginning when the operation was run 
by  the  administration,  no  rent  or  utilities  had  to  be  paid  and  some  staff  and 
administrative support were allocated to this activity for free. 

In 2002, the Commission decided to change the operational set-up and, as a result of 
a  call  for  tenders,  the  Economat  was  outsourced  to  Delhaize  for  a  fee.  When 
Delhaize  started  its  operation,  the  Economat  stock  was  sold  to  Delhaize  and  the 
revenue so generated was also put into the same bank accounts. 

Since then, the amounts on the bank accounts continued to generate interest and the 
total amount now available is of the order of 2,7 M€. 

2. 

THE EFFECTS OF MEASURES TAKEN IN THE CONTEXT OF THE ESTAT CRISIS 

In the aftermath of the ESTAT crisis, the Commission's Accountant took the initiative 
in the summer of 2005, to make an inventory of all bank accounts not established by 
the Accountant and holding Community funds, with the objective of putting an end to 
this anomaly. 

In this context, the Accountant decided that either the money would be transferred to 
the  budget  if  the  existence  of  the  account  was  no  longer  justified,  or  the  account 
would  be  integrated  in  the  Commission's  accounting  perimeter  if  its  continued 
existence was necessary. 

For the ex-Economat accounts (a savings and a checking account) the situation was 
clear:  their  continued  existence  was  no  longer  justified  and  they  were  thus  to  be 
closed and the sums transferred to the Community budget. 

The accounts are held with FORTIS and hold the following amounts (date June 30, 
2008): 

•  FORTIS 210-0339286-32 

27,532 € 

•  FORTIS 047-0610357-16 

2,705,824 € 

for a total of 2,733,356 €. These accounts  are managed jointly by OIB and DG BUDG 
and power of signature on these accounts is held by a number of DG BUDG officials. 

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3. 

GENERAL PRINCIPLES FOR THE USE OF THE FUNDS 

Given the source of the sums on the accounts, i.e an operating surplus mainly due to 
an activity involving expenditure by staff and their families, DG ADMIN was asked to 
identify a number of projects satisfying the following conditions: 

•  the  principle  of  the  projects  would  be  admitted  by  the  budgetary 

commentary of existing budget lines; 

•  the  projects  would  be  of  a  social  nature  and  benefit  staff,  directly  or 

indirectly; 

•  the projects would allow for a one-shot investment and require no follow-
up expenditure in later years, neither in budgetary nor in human resources. 

THE SPECIFIC PROJECTS PROPOSED: DECISION PROCESS 

4. 
In September 2006, DG ADMIN prepared a first list of projects, and on November 6th 
2006,  it  asked  COPAS  for  an  opinion.  COPAS  discussed  this  request  and  the 
proposed  list  of  projects  and  the  opinion  was  delivered  to  DG  ADMIN  on  May  2nd 
2007. COPAS not only gave a positive or negative  opinion  on  each of the projects, 
but also suggested some further projects for investigation. 
On  May  15th  2007,  the  Vice-President  of  the  European  Parliament,  MEP  Onesta, 
presented  to  DG  ADMIN  a  project  for  a  complete  renovation  of  the  EP's  fitness 
centre  and  explained  the  contractual  approach,  which  consisted  in  outsourcing  the 
actual  running  of  the  centre  to  a  third  party,  selected  through  a  public  procurement 
procedure, in exchange for a fee with a profit-sharing mechanism, and the proceeds 
were to be distributed between the participating institutions. DG ADMIN expressed its 
interest  in  principle,  pending  further  information  and  sent  a  list  of  questions  to  Mr 
Onesta  on  June  6th  2007.  On  September  24th  2007,  DG  ADMIN  received  from  the 
EP's administration further information, a partial reply to the questions and a request 
for clarifying its position on a potential participation. Further elements were obtained 
subsequently to the successful call for tenders referred to in section 5 below. 

In  June  2008,  DG  ADMIN  established  a  final  list  of  four  projects,  one  of  its  original 
list, that received a positive COPAS opinion, two suggested by COPAS itself and the 
project with the EP. The project with the EP was presented to COPAS on June 6th, 
2008 and to the CLP on June 24th. 

5. 

THE PROJECTS: WHAT DO THEY COVER AND HOW MUCH DO THEY COST? 

The four projects and the amounts planned to be allocated to them are shown in the 
table below. 

A short description and the estimate of the amounts involved can be found in Annex 
1. The list of rejected projects, with a short rationale for their rejection, can be found 
in Annex 2. 

Short project description 

Support towards the integration of handicapped children into the 
day-care facilities 

Estimated 

amount 

100,000 

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Upgrade of the facilities at Overijse 

Infrastructure for well-being at work 

500,000 

600,000 

Contribution to the EP's Fitness Centre 

  1,500,000 

Total

  2,700,000 

All four projects are in the area of social expenditure for staff. As regards the fitness 
centre,  not  only  is  physical  fitness  an  essential  component  of  staff's  well-being,  but 
the revenue-sharing mechanism, briefly explained in Annex 1, will generate assigned 
revenue to the social actions budget line on an annual basis thereby increasing the 
resources available for this activity. 

The project with the EP represents some risks, related to the commercial viability of 
the  project  and  the  hypotheses  of  the  business  case.  Although  these  are  risks  that 
mainly the contractor must bear, the profit-sharing mechanism will yield results only 
in  proportion  to  the  commercial  success.  For  the  moment,  the  assurance  in  this 
respect  consists  in  the  fact  that  an  important  player  in  this  field,  selected  after  a 
tendering procedure, has agreed to sign a contract with the EP. At no time, neither 
during  the  building  and  equipping  phase,  nor  during  the  actual  running,  will  the 
Commission  have  any  direct  responsibility.  In  fact,  the  Commission  and  the 
European Parliament will sign an administrative agreement setting out the totality of 
the Commission's rights (access conditions for staff identical to the conditions for EP 
staff and the profit-sharing scheme) and obligations (transfer of funds). 

6. 

FINALISING THE BANK ACCOUNT CLEANING OPERATION 

The  approval  of  the  approach  and  of  the  four  projects  determines  the  use  of  these 
appropriations, which constitute assigned revenue pursuant to Article 18 §1 (e) of the 
Financial Regulation. 

7. 

CONCLUSION 

The Commission: 

•  approves  the  use  of  the  accrued  profits  of  the  ex-Economat  for  projects 

related to social actions in favour of staff; 

•  approves the four projects as listed above; 

•  approves the estimated sums to be allocated to each of the four projects, 
leaving detailed implementation mechanisms and final adjustments to the 
competent authorising officer; 

•  instructs DG ADMIN, in collaboration with the Legal  Service, to negotiate 
an  administrative  agreement  with  the  European  Parliament  for  the 
Commission's participation in the EP's Fitness Centre project. 

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ANNEX 1  

The Commission's ex-Economat off budget bank accounts 

The projects 

8. 

SUPPORT  TOWARDS  THE  INTEGRATION  OF  CHILDREN  WITH  DISABILITIES  INTO  THE 
DAY-CARE FACILITIES 

8.1. 

Description 

Day-care facilities welcome children with particular needs on a regular basis. 

Under particular needs, different forms of disabilities are meant: behavioural 
difficulties  as  well  as  different  forms  of  mental  and  physical  disabilities. 
However, the decision to accept or not a child with disabilities will depend on 
several factors and each situation will be evaluated on a case-by-case basis 
the 
together  with 
administration of the day-care facilities and the parents. The final decision will 
be  taken  on  a  case-by-case  basis  and  take  into  account  the  child's  own 
needs, the needs of the group of children with whom it will be in the day-care 
the  essential 
facilities, 
partnership with external specialised teams. 

the  educational  psychologists, 

internal  resources  and 

the  paediatrician, 

infrastructure  and 

the 

In  the  case  of  a  positive  decision,  the  situation  is  regularly  evaluated  and  a 
re-orientation  of  the  child  towards  a  more  appropriate  structure  might  be 
taken if all the parties involved estimate the day-care facility does no longer 
adequately care for the child's needs. 

Appropriate training of the educational teams and adapted material are both 
necessary to effectively welcome children with special needs. 

8.2. 

Estimation of the amount and indicative calendar 

Item 

Equipment and toys 

Special  training  for  195  staff  members  and 
related material (books, videos, etc.) 

Cost (€) 

20,000 

80,000 

Total

100,000 

The  items  of  equipment  and  the  training  can  both  be  ordered  in  2008  as 
framework contracts exist. 

8.3. 

Budget line 

Income: 590 

Expenditure: 26.01.50.04 - Interinstitutional cooperation in the social sphere 

Authorising department: DG ADMIN 

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9. 

IMPROVEMENT OF THE SPORTS AND LEISURE FACILITIES IN OVERIJSE 

9.1. 

Description 

The  staff  of  the  European  institutions  and  their  families  are  keen  to  make 
better  use  of  the  Interinstitutional  Outdoor  Sports  Centre  at  Overijse.  The 
Staff  Committee  has  re-emphasised  this  during  the  'Etats  Généraux'  for 
Social Policy held in June 2008. It is proposed to replace the existing sports 
and  football  pitch  with  a  new  generation  multi-sports  synthetic  pitch  and  to 
equip  the  site  so  that  it  can  be  used  in  all  weather,  at  all  times  and  in  all 
seasons, and thereby stimulate the in- and outdoor use of the Centre by the 
staff's  families  as  well  as  by  groups  of  colleagues,  leisure  circles  and 
pensioners. 

Finally, special attention will be given to access and seating facilities, as well 
as to sanitary installations suited to people with a handicap. 

9.2. 

Estimation of the amount and indicative calendar 

The cost has been estimated by the technical services of OIB at 500,000 €. 
Due  to  the  time  needed  to  obtain  local  permits  and  authorisations,  the 
amounts can only be used in the 2009 – 2010 timeframe. 

9.3. 

Budget line 

Income: 590 

Expenditure: 26.01.22.03 - Expenditure related to buildings in Brussels 

Authorising department: OIB 

10. 

INFRASTRUCTURE FOR WELL-BEING AT WORK 

10.1.  Description 

The staff of the Commission, and in particular the Leisure Circles, would like 
to  have  the  use  of  2  multi-purpose  rooms  in  the  basement  of  the  VM2 
building,  which  also  houses  the  Foyer.  The  space  was  previously  used 
mainly for archives and requires extensive renovation. It would be possible to 
create  one  large  room  of  290  m²  which  would  be  used  mainly  for  cardio 
activities,  which  require  a  lot  of  space,  and  a  smaller  room  of  100  m²  for 
smaller group activities. There would also be showers and changing rooms. 
Currently,  many  of  our  Leisure  Groups  have  to  rent  space  in  the  private 
sector or in communes. The availability of these multi-purpose rooms would 
also  have  a  positive  effect  on  the  use  of  the  Foyer,  and  would  fit  within  the 
Commission policy for well-being at work. 

10.2.  Estimation of the amount and indicative calendar 

The cost has been estimated by the technical services of OIB at 600,000 €.  

10.3.  Budget line 

Income: 590 

Expenditure: 26.01.22.03 - Expenditure related to buildings in Brussels 

Authorising department: OIB 

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11. 

CONTRIBUTION TO THE EP'S FITNESS CENTRE 

11.1.  Description 

The  objective  of  the  global  project  is  to  renovate  and  extend  the  existing 
"gym and fitness" space (1375 m²) of the European Parliament by adding an 
"aquatic  and  relax"  space  (925  m²)  to  it,  equip  it  and  let  it  be  run  by  an 
outside contractor in exchange for: 

–  the payment of a fixed fee (set at 300,000 € in the call for tenders); 

–  a  share  of  windfall  profits  (ranging  from  10%  on  profits  between  100,000 

and 200,000 € to 50% on pr ofits above 500,000 €); 

–  identical access and subscription conditions for the Commission's staff as 

those enjoyed by the EP's staff. 

The  Commission  would,  through  the  transfer  of  a  part  of  the  ex-Economat 
funds  to  the  EP's  operational  budget,  participate  in  the  building  and 
equipment expenditure. 

As  a  result  of  this  participation,  a  pro  rata  share  of  the  revenue  thus 
generated would be entered into the Commission's administrative budget as 
assigned  revenue  on  the  "social  activities"  budget  line  and  contribute  to 
further spending on social objectives. 

11.2.  Estimation of the amount and indicative calendar 

The amount is determined by a political decision on the level of participation. 
The  proposed  amount  of  1,500,000  €  corresponds  to  around  30%  of  the 
estimated cost of the project, as approved by the Bureau of the EP. 

The contractor for the running of the Centre has been selected through a call 
for  tenders  and  the  call  for  tenders  for  the  renovation  works  has  been 
launched, with a view to finalise the works before the end of 2009. 

The  amount  itself,  however,  could  well  be  transferred  to  the  EP  already  in 
2008, dependent on the date the administrative arrangement will be signed. 

11.3.  Budget line 

Income: 590 

Expenditure: 

–  For the contribution to the EP: 26.01.50.04 - Interinstitutional cooperation 

in the social sphere 

–  For 

the  annual  assigned 

revenue:  26.01.50.04 

- 

Interinstitutional 

cooperation in the social sphere 

Authorising department: DG ADMIN 

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ANNEX 2  

The Commission's ex-Economat off budget bank accounts 

The rejected projects 

12. 

A COMMISSION FITNESS CENTRE 

The  amounts  available  are  insufficient  to  transform  an  existing  space  and 
equip  it  to  turn  it  into  a  commercially  viable  Fitness  Centre.  As  this  true  for 
the total sum, it is even more so for a part of it, since other projects had to be 
selected as well. 

13. 

THE REFURBISHMENT OF CAFETERIAS AND RESTAURANTS 

The staff representatives argued that this expenditure was to be covered by 
the normal budgetary resources of OIB and their argument was accepted. 

14. 

THE INSTALLATION OF SHOWERS FOR COMMUTING BIKERS 

The staff representatives argued that this expenditure was to be covered by 
the normal budgetary resources of OIB and their argument was accepted. 

15. 

THE  OPENING  OF  LOCAL  EMPLOYMENT  AGENCIES  IN  THE  MAIN  COMMISSION 
BUILDINGS 

These  LEA  distribute  the  Titres-services  /  Dienstencheques,  through  which 
household  services  can  be  legally  bought,  instead  of  on  the  black  or  grey 
market. 

Such an agency needs space, amenities and staff and therefore has follow-
up costs, violating one of the criteria, viz. one-shot investment without follow-
up expenditure. 

16. 

PURCHASING THE ETTERBEEK HOSPITAL 

The hospital would, once acquired, be transformed into multi-purpose centre, 
housing  a  home  for  the  elderly  and  disabled,  a  nursery,  a  day-care  centre 
and offer meeting space to the leisure groups. 

The running of such a centre would obviously require a considerable annual 
expenditure,  violating  one  of  the  criteria,  viz.  one-shot  investment  without 
follow-up expenditure. 

17. 

RESERVATION OF PLACES FOR ADULT DEPENDENTS WITH DISABILITIES 

Through  a  grant-like  contribution  to  either  individual  institutes  or  to  the 
responsible  agencies  in  Brussels  and  in  the  three  communities  (Flemish, 
French  and  German),  active  or  retired  EU  staff  would  have  had  a  form  of 
priority for its adult dependents with disabilities. 

Although  initially  promising,  the  scheme  could  eventually  not  be  carried 
through,  essentially  because  of  the  reluctance  of  the  Belgian  authorities 
concerned to accept the Commission's proposal. 

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