Report on the annual accounts of the European Police Office (Europol) for the financial year 2010, together with the Office's reply
Date: 2011-09-20
Institutions: European Court of Auditors
Subjects: Europol, administration of the Institutions, auditing, budgetary control, financial control, powers of the institutions (EU)








C_2011366EN.01017901.xml










15.12.2011   


EN


Official Journal of the European Union


C 366/179





REPORT
on the annual accounts of the European Police Office (Europol) for the financial year 2010, together with the Office's reply
2011/C 366/32

INTRODUCTION







1.


The European Police Office (hereinafter ‘the Office’), which is located in The Hague, was established by Council Decision 2009/371/JHA of 6 April 2009 (1). This Decision, which applies from 1 January 2010, replaces the provisions of the Convention, based on Article K.3 of the Treaty on European Union, on the establishment of a European Police Office (the Europol Convention). The objective of the Office is to support and strengthen action by the competent authorities of the Member States and their mutual cooperation in preventing and combating organised crime, terrorism and other forms of serious crime affecting two or more Member States (2).










2.


The Office's 2010 budget amounted to 92,8 million euro. The number of staff employed by the Office at the end of the year was 436.





STATEMENT OF ASSURANCE







3.


Pursuant to the provisions of Article 287(1), second subparagraph, of the Treaty on the Functioning of the European Union, the Court has audited the annual accounts (3) of the Office, which comprise the ‘financial statements’ (4) and the ‘reports on the implementation of the budget’ (5) for the financial year ended 31 December 2010, and the legality and regularity of the transactions underlying those accounts.










4.


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 (6).





The Director's responsibility







5.


As authorising officer, the Director implements the revenue and expenditure of the budget in accordance with the financial rules of the Office, under his own responsibility and within the limits of the authorised appropriations (7). The Director is responsible for putting in place (8) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts (9) that are free from material misstatement, whether due to fraud or error, and for ensuring that the transactions underlying those accounts are legal and regular.





The Court's responsibility







6.


The Court's responsibility is to provide, on the basis of its audit, a statement of assurance as to the reliability of the annual accounts of the Office and the legality and regularity of the transactions underlying them.










7.


The Court conducted its audit in accordance with the IFAC and ISSAI (10) International Auditing Standards and Codes of Ethics. Those standards require the Court to comply with ethical requirements and to plan and perform the audit so as to obtain reasonable assurance as to whether the accounts are free of material misstatement and whether the underlying transactions are legal and regular.










8.


The Court's audit involves performing procedures to obtain audit evidence of the amounts and disclosures in the accounts and of the legality and regularity of the transactions underlying them. The procedures selected, including its assessment of the risks of material misstatement of the accounts or of illegal or irregular transactions, whether due to fraud or error, depend on its audit judgement. In making those risk assessments, internal controls relevant to the entity's preparation and presentation of accounts are considered in order to design audit procedures that are appropriate in the circumstances. The Court's audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the accounts.










9.


The Court believes that the audit evidence obtained is sufficient and appropriate to provide a basis for the opinions set out below.






Opinion on the reliability of the accounts








10.


In the Court's opinion, the Office's Annual Accounts (11) fairly present, in all material respects, its financial position as of 31 December 2010 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its Financial Regulation.






Opinion on the legality and the regularity of the transactions underlying the accounts








11.


In the Court's opinion, the transactions underlying the annual accounts of the Office for the financial year ended 31 December 2010 are, in all material respects, legal and regular.










12.


The comments which follow do not call the Court's opinions into question.





COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT







13.


An amount of 22,6 million euro has been carried forward to 2011, representing 25 % of the 2010 budget. The carry-forward rate was 49 % in Title II — Administrative expenditure and 59 % in Title III — Operational expenditure. The high level of appropriations carried forward, matched by the low level of accrued expenditure (2,9 million euro), is excessive and at odds with the budgetary principle of annuality.





This Report was adopted by Chamber IV, headed by Mr Igors LUDBORŽS, Member of the Court of Auditors, in Luxembourg at its meeting of 20 September 2011.


For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President





(1)  OJ L 121, 15.5.2009, p. 37.

(2)  The Annex summarises the Office's competences and activities. It is presented for information purposes.

(3)  These accounts are accompanied by a report on the budgetary and financial management during the year which gives inter alia an account of the rate of implementation of the appropriations, with summary information on the transfers of appropriations among the various budget items.

(4)  The financial statements include the balance sheet and the economic outturn account, the cash-flow table, the statement of changes in capital and the annex to the financial statements, which includes a description of the main accounting policies and other explanatory information.

(5)  The budget implementation reports comprise the budget outturn account and its annex.

(6)  OJ L 248, 16.9.2002, p. 1.

(7)  Article 33 of Commission Regulation (EC, Euratom) No 2343/2002 (OJ L 357, 31.12.2002, p. 72).

(8)  Article 38 of Regulation (EC, Euratom) No 2343/2002.

(9)  The rules concerning the presentation of the accounts and accounting by the Agencies are laid down in Chapter 1 of Title VII of Regulation (EC, Euratom) No 2343/2002 as last amended by Regulation (EC, Euratom) No 652/2008 (OJ L 181, 10.7.2008, p. 23) and are integrated as such in the Financial Regulation of the Office.

(10)  International Federation of Accountants (IFAC) and International Standards of Supreme Audit Institutions (ISSAI).

(11)  The Final Annual Accounts were drawn up on 8 September 2011 and received by the Court on 12 September 2011. The Final Annual Accounts can be found on the following website http://eca.europa.eu or http://www.europol.europa.eu/


ANNEX

European Police Office (The Hague)


Competences and activities








Areas of Union competence deriving from the Treaty


(Articles 87, 88 and 89 TFEU)




Objective

The objective of the Office is to support and strengthen action by the competent authorities of the Member States and their mutual cooperation in preventing and combating organised crime, terrorism and other forms of serious crime affecting two or more Member States.





Competences of the Office


(Council Decision 2009/371/JHA of 6 April 2009 establishing the European Police Office (Europol) (1)





Competence

The Office's competence shall cover organised crime, terrorism and other forms of serious crime affecting two or more Member States in such a way as to require a common approach by the Member States owing to the scale, significance and consequences of the offences.

Principal tasks







—


To collect, store, process, analyse and exchange information and intelligence,










—


to notify the competent authorities of the Member States without delay, via the national unit, of information concerning them and of any connections identified between criminal offences,










—


to aid investigations in the Member States, in particular by forwarding all relevant information to the national units,










—


to ask the competent authorities of the Member States concerned to initiate, conduct or coordinate investigations and to suggest the setting up of joint investigation teams in specific cases,










—


to provide intelligence and analytical support to Member States in connection with major international events,










—


to prepare threat assessments, strategic analyses and general situation reports relating to its objective, including organised crime threat assessments.





Additional tasks







—


To develop specialist knowledge of the investigative procedures of the competent authorities of the Member States and to provide advice on investigations,










—


to provide strategic intelligence to assist and promote the efficient and effective use of the resources available at national and Union level for operational activities and the support of such activities.





Additionally, assist Member States through support, advice and research in the following areas:







—


the training of members of their competent authorities, where appropriate in cooperation with the European Police College (CEPOL),










—


the organisation and equipment of those authorities by facilitating the provision of technical support between the Member States,










—


crime prevention methods,










—


technical and forensic methods, analysis and investigative procedures.





And the Office shall also act as the Central Office for combating euro counterfeiting in accordance with Council Decision 2005/511/JHA of 12 July 2005 on protecting the euro against counterfeiting, by designating the Office as the Central Office for combating euro counterfeiting. The Office may also encourage the coordination of measures carried out in order to fight euro counterfeiting by the competent authorities of the Member States or in the context of Joint Investigation Teams, where appropriate in liaison with Union entities and third States' bodies. Upon request, the Office may financially support investigations of euro counterfeiting.





Governance




1 —   Management Board

One delegate (and alternate) from each Member State and from the Commission.

2 —   Director







—


Director appointed by the Council, acting by qualified majority, from a list of at least three candidates presented by the Management Board, for a four-year period (may be extended for not more than four years).










—


The Director is assisted by three Deputy Directors appointed for a four-year period extendable once.










—


The Director leads the Office and is accountable to the Management Board in respect of the performance of his/her duties.





3 —   External Audit







—


European Court of Auditors (ECA).










—


Internal Audit Service (IAS) of the Commission.










—


Joint Supervisory Body (JSB).










—


Additionally: Internal Audit Function (IAF) and Data Protection Officer (DPO) — functionally independent, associated with the line organisation (established based on the Europol Council Decision).





4 —   Discharge authority

European Parliament acting on recommendation of the Council.





Resources made available to the Office in 2010




Budget (2010)

92,8 million euro

Staff

Total number of staff made available according to establishment plan: 453 (temporary agents), plus 25 seconded national experts and 78 contract agents (including 6 local staff).





Products and services 2010




Overall satisfaction

The results of the independent Europol User Survey 2010 (of 584 users, e.g. investigators) indicated the highest levels of Member State satisfaction with the Office ever recorded since the introduction of the user survey in 2002.

1.   Strategic products and services (Strategic analysis capability)







—


Completion of six threat assessments (Introduction of the Euro in Estonia, Situation report on Trafficking in Human Beings, Threat Assessment for Baltic Sea, iOCTA (2), LAC-OCTA (3) and the Threat Assessment for COSI (4).










—


Organised Crime (OC)-Scan (focused Threat Assessments on new or emerging organised crime threats and trends) launched to improve the relevance and timeliness of strategic products. Seven reports were delivered.










—


100 % of the Office's strategic products (excluding counter terrorism and counter proliferation) are aligned with the EU OCTA (5) findings.










—


The Office supported and contributed to the establishment of the new EU Policy Cycle.





2.   Operational products and services


2.1.   The Office as support centre for law enforcement operations


(Analysis Work Files, operational analysis reports and other reporting, operational support on the spot and from the headquarters, Joint Investigation Teams)







—


The Office supported competent authorities in EU Member States in 11 738 cross–border cases, an increase of 12 % over 2009.










—


In-depth analytical and operational support was provided in over 150 significant cross-border investigations, some of which have lasted for one to two years and most of which are still ongoing.










—


35 % of operations supported by the Office were in relation to drugs, but the Office's greatest operational impact was in the field of euro-counterfeiting.










—


The Office was involved in all major euro counterfeiting investigations in the EU. In 2010, 838 payment card fraud and euro counterfeiting cases were actively supported by the Office, culminating in the dismantling of five major print shops. The outcomes of the euro counterfeit investigations supported financially by the Office (35) included the seizure of over 6 million euro counterfeits, 70 arrests and the dismantling of three print shops.










—


Internal procedures are in place for the full range of cross-check services foreseen in the provision of 24/7 operational support.










—


A structured and reliable operational outcomes database was developed. It enables the centralisation of information pertaining to operations supported by the Office and automated reporting.










—


57 events were reported by the end of 2010 in which awareness of the Office's support to Joint Investigation Teams was raised.










—


The plan to implement the regional model was finalised by 30.09.2010 which consists of a number of interlinked elements — Regional Support Officers (RSO), hub Analysis Work Files, flow of intelligence, document management, coordination with associated working groups, etc.










—


The required capabilities to support the implementation of the Terrorist Finance Tracking Programme (TFTP) Agreement were put in place by the target date (with the establishment of a dedicated unit).










—


A public-private–partnership plan (the Outreach Programme) was developed by 31.12.2010.










—


A joint operational plan with Interpol (6) was in the final stages of preparation by the end of 2010.










—


A joint agencies report on internal security was presented to the Heads of Justice and Home Affairs (JHA) Agencies.










—


The Office chaired the Heads of Agencies cooperation in the area of JHA.





2.2.   The Office as the EU criminal information hub


(Information management capabilities, Secure Information Exchange Network Application (SIENA), Europol Information System (EIS), Liaison Bureaux Network)







—


Europol Information System (EIS) version 1.6 was rolled out by 31.01.2010.










—


SIENA (7) version 2.0 was delivered on 22 October 2010.










—


8 Member States' national asset recovery offices were linked to SIENA by 31.10.2010. Project to be continued through 2011.










—


The elaboration of all business processes relevant to interoperability and cross matching of data progressed further throughout 2010.










—


The Office liaison officers ensure a live link between Europol headquarters in The Hague and 27 Europol National Units in the national capitals of the Member States. This is a unique network of 129 liaison officers who play an important role in everyday law enforcement activities by facilitating the exchange of information, as well as providing support and coordination for ongoing investigations. The Office also hosts liaison officers from 10 non-EU countries and organisations who work together with the Office on the basis of cooperation agreements. This Liaison Bureaux Network is supported by secure channels of communication provided by the Office. In addition, the Office has seconded two liaison officers to Washington (USA) and one to Interpol's headquarters in Lyon (France).





2.3.   Expertise knowledge and training


(Europol Platform for Experts (EPE), data exchange platforms and storage solutions, knowledge products and services, training, conferences and awareness sessions)







—


The Office actively participated in the EU Crime Prevention Network (EUCPN). Independent of the EUCPN, the Office continued to promote the use of alternative approaches to tackling Organised Crime (OC) as part of the COSI group on OC.










—


The generic concept for the Europol Platform for Experts (EPE) was developed and implemented. Four platforms were established.










—


The EU Bomb Database System was released into production in October 2010.










—


Three additional certified Cybercrime training modules for the European Cybercrime Training Education Group (ECTEG) were designed, delivered and evaluated.










—


The assessment of e-learning options in cooperation with CEPOL (European Police College) progressed well with the Office being the subject of the first CEPOL e-learning course. Other e-learning courses under development of relevance for the Office are: Cybercrime and Schengen Treaty.





2.4.   External relations


(Relations with cooperation partners)







—


The Office cooperates with a number of EU partners, and with third countries and organisations. The exchange of information with these partners takes place on the basis of cooperation agreements. Two types of agreement determine the nature of cooperation with third parties. Strategic agreements make it possible for the two parties involved to exchange all information with the exception of personal data, while operational agreements also allow the exchange of personal data.










—


The Office currently cooperates with 17 non-EU countries, 9 EU bodies and agencies and 3 other international organisations, including Interpol, which features in many aspects of the Offices operational work.




The Heads of Europol National Units (HENUs) of all EU Member States, including observers from cooperation partners (such as Eurojust and Interpol) and the Commission, meet on a regular basis to assist the Office on operational matters and to provide support in the establishment of Joint Investigation Teams involving the Office.





Source: Information supplied by the Office.






(1)  Replaces the provisions of the Convention based on Article K.3 of the Treaty on the European Union, on the establishment of a European Police Office (Europol Convention).

(2)  Internet facilitated Organised Crime Threat Assessment.

(3)  Latin America and Caribbean Organised Crime Threat Assessment.

(4)  Standing Committee on Operational Cooperation on Internal Security.

(5)  Organised Crime Threat Assessment.

(6)  International Criminal Police Organisation (ICPO).

(7)  Secure Information Exchange Network Application.



THE OFFICE'S REPLY






13.


Europol accepts the principle but points out that a significant amount of the carry-over was due to the unique circumstance of the agency's move to its new headquarters in 2011, given a delay of the delivery of the building in 2010. The breakdown of the carry-forward (22,6 million euro) is as follows:






—


11,3 million euro for expenditure relating to the new Europol headquarters,










—


1,8 million euro relates to Chapter 26 (Article 58.4 Europol Council Decision — ECD: liabilities concerning the previous legal framework of Europol),










—


9,5 million euro for other expenditure.




Leaving aside the expenditure for the new Europol headquarters and Article 58.4 of the ECD, the carry-forward rate was 10,24 % in relation to the budget revenue.
Europol will take measures to address the comment from the ECA.