Report on the annual accounts of the European Asylum Support Office for the financial year 2012, together with the Office’s replies
Date: 2013-07-15
Institutions: European Court of Auditors
Subjects: European Union Agency for Asylum, administration of the Institutions, auditing, budgetary control, closing of accounts, financial control, powers of the institutions (EU)








C_2013365EN.01007301.xml










13.12.2013   


EN


Official Journal of the European Union


C 365/73






REPORT

on the annual accounts of the European Asylum Support Office for the financial year 2012, together with the Office’s replies
2013/C 365/11

INTRODUCTION







1.


European Asylum Support Office (hereinafter ‘the Office’, aka ‘EASO’), which is located in Valletta, was established by Regulation (EU) No 439/2010 of the European Parliament and of the Council (1). The Office’s task is to support the development of the Common European Asylum System. It was established with the aim of enhancing practical cooperation on asylum matters and helping Member States fulfil their European and international obligations to give protection to people in need. EASO acts as a centre of expertise on asylum. It also provides support to Member States whose asylum and reception systems are under particular pressure.










2.


The Commission granted financial autonomy to the Office on 20 September 2012. Therefore the audited period for the financial year 2012 runs from 20 September 2012 to 31 December 2012.





INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE







3.


The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of key controls of the Office’s supervisory and control system. This is supplemented by evidence provided by the work of other auditors (where relevant) and an analysis of management representations.





STATEMENT OF ASSURANCE







4.


Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:






(a)


the annual accounts of the Office, which comprise the financial statements (2) and the reports on the implementation of the budget (3) for the financial year ended 31 December 2012, and










(b)


the legality and regularity of the transactions underlying those accounts.









The management’s responsibility







5.


In accordance with Articles 33 and 43 of Commission Regulation (EC, Euratom) No 2343/2002 (4), the management is responsible for the preparation and fair presentation of the annual accounts of the Office and the legality and regularity of the underlying transactions:






(a)


The management’s responsibilities in respect of the Office's annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (5); making accounting estimates that are reasonable in the circumstances. The Director approves the annual accounts of the Office after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the Office in all material respects.










(b)


The management’s responsibilities in respect of the legality and regularity of the underlying transactions and compliance with the principle of sound financial management consist of designing, implementing and maintaining an effective and efficient internal control system comprising adequate supervision and appropriate measures to prevent irregularities and fraud and, if necessary, legal proceedings to recover funds wrongly paid or used.









The auditor’s responsibility







6.


The Court’s responsibility is, on the basis of its audit, to provide the European Parliament and the Council (6) with a statement of assurance as to the reliability of the annual accounts and the legality and regularity of the underlying transactions. The Court conducts its audit in accordance with the IFAC International Standards on Auditing and Codes of Ethics and the INTOSAI International Standards of Supreme Audit Institutions. These standards require the Court to plan and perform the audit to obtain reasonable assurance as to whether the annual accounts of the Office are free from material misstatement and the transactions underlying them are legal and regular.










7.


The audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the accounts and the legality and regularity of the underlying transactions. The procedures selected depend on the auditor’s judgement, which is based on an assessment of the risks of material misstatement of the accounts and material non-compliance by the underlying transactions with the requirements in the legal framework of the European Union, whether due to fraud or error. In assessing these risks, the auditor considers any internal controls relevant to the preparation and fair presentation of the accounts, as well as the supervisory and control systems that are implemented to ensure the legality and regularity of underlying transactions, and designs audit procedures that are appropriate in the circumstances. The audit also entails evaluating the appropriateness of accounting policies, the reasonableness of accounting estimates and the overall presentation of the accounts.










8.


The Court considers that the audit evidence obtained is sufficient and appropriate to provide a basis for its statement of assurance.






Opinion on the reliability of the accounts








9.


In the Court’s opinion, the Office’s annual accounts present fairly, in all material respects, its financial position as at 31 December 2012 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its Financial Regulation and the accounting rules adopted by the Commission’s accounting officer.






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








10.


In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2012 are legal and regular in all material respects.










11.


The comments which follow do not call the Court’s opinions into question and should be considered in the light of the fact that the process of setting up the new Office and establishing its procedures is still ongoing.





COMMENT ON THE RELIABILITY OF ACCOUNTS







12.


The Office’s accounting system has not yet been validated by the Accounting Officer.





COMMENT ON THE LEGALITY AND REGULARITY OF TRANSACTIONS







13.


A carry-over of 0,2 million euro was not covered by a legal commitment (contract) and was therefore irregular.





COMMENTS ON INTERNAL CONTROL







14.


No physical inventory has been performed to ensure that all equipment purchased to set up the Office is included in the register.










15.


Fifty payments, representing about 20 % of the total amount of payments, were made after the deadlines set by the Financial Regulation.










16.


Ten of the 16 internal control standards (7) have not yet been fully implemented.





COMMENTS ON BUDGETARY MANAGEMENT







17.


The budgetary needs for 2012 were considerably overestimated: only 4,8 million euro out of the 7 million euro transferred upon receiving financial autonomy were committed.










18.


Committed appropriations of 3,2 million euro have been carried over, representing 65,13 % of total committed appropriations for the period of financial autonomy (8). These carry-overs concern title I (staff expenditure) at 0,3 million euro, title II (other administrative expenditure) at 1,4 million euro and title III (operational activities) at 1,5 million euro. They are mostly related to invoices not yet received and/or paid at year-end and to pending reimbursements of costs relating to experts. Furthermore, some 0,8 million euro concern refurbishment work carried out at the Office’s premises in 2012, for which the payments will be made following final acceptance (9). Such a high level of carry-overs is however at odds with the budgetary principle of annuality.










19.


The amounts of several budget commitments were insufficient to cover the related goods and services delivered. The estimated amount of deliveries not covered was 0,2 million euro, resulting in a corresponding overstatement in the Budget Outturn Account.





OTHER COMMENTS







20.


EASO coordinates the deployment of Member States’ experts to support other Member States in crises (emergency support actions) and reimburses experts’ mission costs on a flat-rate basis. Total reimbursed mission costs amounted to some 417 000 euro (24 % of total payments). Flat-rate reimbursements of costs were also made to external participants attending meetings held at EASO’s premises. Meeting costs are spread over various budget lines and the total amount is unknown. Although the application of flat rates reduces administrative burdens, they may be higher than the actual costs incurred.










21.


To host EASO, the Maltese Government offered the building (10) and the lease agreement with the Maltese Transport Authority stipulates that the premises ‘are being transferred in a finished state with essential service points being provided’. For the building to become functional, however, it needed to be adapted (11) at an estimated cost of 4,3 million euro, of which 3,8 million euro was to be covered by the Commission. By the end of 2012, most of the work had been completed and advance payments amounting to some 3 million euro had been made to the Maltese Government. Furthermore EASO will pay rent amounting to some 3,7 million euro over a nine-year period.










22.


The Commission had informed the European Parliament and Council about the host arrangements and the fact that the building required some adaptation to be financed by the Maltese Government and the Commission. Although the budgetary authorities were informed about the project, there is no evidence that they were aware of the expected costs and the EU’s share thereof.










23.


There is room to improve the transparency of recruitment procedures: there was no evidence that weightings and threshold scores to be invited for interviews and for being put on the reserve list were set before examination of the applications, or that questions for interviews and written tests were set before the examination of applications.





This Report was adopted by Chamber IV, headed by Dr Louis GALEA, Member of the Court of Auditors, in Luxembourg at its meeting of 15 July 2013.


For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA


President





(1)  OJ L 132, 29.5.2010, p. 11.

(2)  These include the balance sheet and the economic outturn account, the cash flow table, the statement of changes in net assets and a summary of the significant accounting policies and other explanatory notes.

(3)  These comprise the budgetary outturn account and the annex to the budgetary outturn account.

(4)  OJ L 357, 31.12.2002, p. 72.

(5)  The accounting rules adopted by the Commission’s accounting officer are derived from the International Public Sector Accounting Standards (IPSAS) issued by the International Federation of Accountants or, where relevant, the International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.

(6)  Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (OJ L 248, 16.9.2002, p. 1).

(7)  ICS Nos 3, 4, 5, 6, 8, 9, 10, 11, 13 and 14.

(8)  40,32 % when taking the full 2012 calendar year into account.

(9)  Final acceptance was ongoing in May 2013.

(10)  Described in the bid as state of the art.

(11)  According to the related grant agreement between the Commission and the Maltese Government, this includes i.e. the modification of office space layout, double glazing, IT and security infrastructure, installation of a conference room, etc.


ANNEX

European Asylum Support Office, EASO (Valletta Harbour, Malta)


Competences and activities








Areas of Union competence deriving from the Treaty


(Article 3 of the Treaty on the European Union and Articles 67, 78 and 80 of the Treaty on the Functioning of the European Union)



The Union shall offer its citizens an area of freedom, security and justice without internal frontiers, in which the free movement of persons is ensured in conjunction with appropriate measures with respect to external border controls, asylum, immigration and the prevention and combating of crime.
The Union shall develop a common policy on asylum, subsidiary protection and temporary protection with a view to offering appropriate status to any third-country national requiring international protection and ensuring compliance with the principle of non-refoulement. This policy must be in accordance with the Geneva Convention of 28 July 1951 and the Protocol of 31 January 1967 relating to the status of refugees, and other relevant treaties.
For that purpose, measures should be adopted for a common European asylum system comprising: a uniform status of asylum for nationals of third countries, valid throughout the Union; a uniform status of subsidiary protection for nationals of third countries who, without obtaining European asylum, are in need of international protection; a common system of temporary protection for displaced persons in the event of a massive inflow; common procedures for the granting and withdrawing of uniform asylum or subsidiary protection status; criteria and mechanisms for determining which Member State is responsible for considering an application for asylum or subsidiary protection; standards concerning the conditions for the reception of applicants for asylum or subsidiary protection; partnership and cooperation with third countries for the purpose of managing inflows of people applying for asylum or subsidiary or temporary protection.
In the event of one or more Member States being confronted by an emergency situation characterised by a sudden inflow of nationals of third countries, provisional measures may be adopted for the benefit of the Member State(s) concerned.
The policy of the Union on asylum and its implementation shall be governed by the principle of solidarity and fair sharing of responsibility, including its financial implications, between the Member States.





Competences of the Office


(Regulation (EU) No 439/2010 of the European Parliament and of the Council establishing a European Asylum Support Office)




Objectives

EASO contributes to the creation of a Common European Asylum System. EASO’s purpose is to facilitate, coordinate and strengthen practical cooperation among Member States on the many aspects of asylum, such as: providing practical and operational support to Member States; providing operational support to Member States subject to particular pressure on their asylum systems, including the coordination of asylum support teams made up of national asylum experts; providing scientific and technical assistance for EU policymaking and legislation in all areas having a direct or indirect impact on asylum.

Tasks







—



Permanent support: supporting and stimulating the common quality of the asylum process through common training, a common asylum curriculum, common quality and common Country of Origin Information.










—



Special support: tailor-made assistance, capacity building, relocation, specific support and special quality-control processes.










—



Emergency support: organising solidarity for Member States confronted with particular pressures by providing temporary support and assistance to repair or to rebuild the asylum system.










—



Information and analysis support: sharing and merging information and data, analysis and assessment: not only comparing and sharing information, but also common trend analysis and common assessment.










—



Third country support: supporting the external dimension, supporting partnerships with third countries to reach common solutions, for example by capacity building and regional protection programmes, and coordinating Member States’ actions on resettlement.









Governance




Management Board


Composition

The EASO Management Board is composed of one member from each Member State except Denmark, two members from the European Commission and one non-voting member from the UNHCR. All members are appointed on the basis of their experience, professional responsibility and high degree of expertise in the asylum field.
Denmark is invited to attend all meetings of the Management Board and other relevant meetings as an observer.
Croatia is also invited to attend all the meetings of the Management Board and other relevant meetings as an observer, until becoming a full member of EASO following the entry into force of the Treaty of Accession between the EU and Croatia of 9 December 2011.

Tasks

The key functions of the Management Board, as the governing and planning body of EASO, are outlined in Article 29 of the EASO Regulation and include the appointment of the Executive Director and the adoption of EASO’s work programmes and annual reports, and of EASO’s general budget. It has overall responsibility for ensuring that EASO performs its duties effectively.

Executive Director

The Executive Director, who is independent in the performance of his tasks, is the legal representative of the Office and is responsible, inter alia, for the administrative management of EASO and for the implementation of the work programme and the decisions of the Management Board. The Executive Director of EASO, Dr Robert K. Visser, took up office on 1 February 2011. His term of office is five years, renewable once for a further three years.

Working Parties

According to Article 32 of the EASO Regulation, EASO may set up working parties composed of experts.

Consultative Forum

In 2011 – the first year of its operation – EASO set up a Consultative Forum in accordance with Article 51 of the EASO Regulation. The Consultative Forum enables EASO to ensure there is close dialogue with civil society organisations and relevant competent bodies. The Consultative Forum constitutes a mechanism for the exchange of information and pooling of knowledge between EASO and civil society organisations and relevant bodies operating in the asylum field. In accordance with the EASO Regulation, the Consultative Forum meets in plenary at least once a year. In addition, EASO has an annual consultation calendar to organise its various consultation methodologies and activities, i.e. expert meetings, workshops, seminars and online consultation.

Internal audit

European Commission’s Internal Audit Service (IAS).

External audit

European Court of Auditors.

Discharge authority

European Parliament acting on a recommendation from the Council.





Resources made available to the Office in 2012




Final Budget

10 million euro (EASO was granted financial autonomy on 20 September 2012, the budget having been implemented by the European Commission until that date).

Staff as at 31 December 2012

Authorised posts (temporary staff): 38. Posts occupied: 38
Other posts (contract staff and SNEs): 23. Posts occupied: 20
Total posts: 61
Posts occupied: 58, by staff assigned to the following duties:






—


operational tasks: 30










—


administrative and support tasks: 28









Products and services in 2012



EASO’s activities can be divided into five focus areas: permanent support, special support, emergency support, information and analysis support and third country support.
Permanent support: EASO organised 15 train-the-trainer sessions, updated 10 training modules, adopted a Training Strategy and organised the Annual Didactic Seminar. EASO also developed a quality assessment methodology, organised 16 COI meetings with Working parties and the Task Force, published two COI reports on Afghanistan, organised three workshops for practical cooperation and arranged four expert meetings on Unaccompanied Minors.
Special support: EASO launched special support for Sweden and presented its evaluation report on relocation projects to the Commission, the Council and the European Parliament.
Emergency support: EASO gave emergency support to Greece for a full year, and to Luxembourg in February 2012.
Information and analysis support: EASO published its Annual Report on the state of asylum in the EU in 2011. Moreover, EASO presented an early warning analysis and trends prognosis on the asylum situation in the EU to the Council and other partners.
Third country support: EASO organised a conference on resettlement.
With regard to EASO’s organisation, EASO achieved financial independence, organised four Management Board meetings, moved to its new premises, signed a working agreement with Frontex, held its second Consultative Forum meeting and consulted civil society on various topics including its annual report.





Source: Information supplied by the Office.







THE OFFICE’S REPLIES






12.


A report on the validation of EASO accounting system was drafted in May 2013. The final report was signed on 29 May 2013.










13.


During the start-up phase of EASO and prior to financial independence, several provisional commitments were established to cover different type of expenditures. Before the financial independence, it was decided not to de-commit them. At the year-end 2012, it was decided to carry forward the said commitments to 2013, in order to ensure that (possible outstanding) 2012 related payment requests were covered by a budgetary commitment. Currently, EASO continuously monitors the consumption of budgetary commitments. This will ensure a regular carrying forward to 2014.










14.


A physical inventory will be performed during the third quarter of 2013.










15.


The backlog was a consequence of the transfer of data in ABAC as well as of the transfer of physical files for the purposes of the financial independence. EASO expects late payments to decrease radically by summer 2013.










16.


Following the self-assessment of April 2013, EASO is now close to the full implementation and will finalise this process by the end of 2013.










17.


2012 was an exceptional year in terms of budgetary requirements due to the financial independence, and EASO had only two and a half months to commit the mentioned 4,8 million euro.










18.


Even if the percentage of carry-over was considerably high, it was mostly related to the late date of the financial independence, at the end of September 2012, and the moving to the new permanent premises, also in September of the same year.










19.


The insufficient amount to cover legal obligations related to good and services delivered were due to exceptional circumstances of 2012 (financial independence). EASO has already established effective planning, monitoring and reporting systems for budget commitments in order to ensure that legal obligations are fully covered by sufficient budgetary commitments.










20.


The framework for the reimbursement of the travel costs of experts on the basis of flat rates was prepared with the technical support of DG HOME in 2011 and then was presented to and adopted by the EASO Management Board. The flat rate system took into account the flexibility to deploy experts on short term notice with corresponding high flight costs, including the costs to travel to remote areas such as the border areas. In order to ensure sound financial management, this system will be subject to regular review.










21.


The European Commission awarded a de facto grant to the Maltese Ministry of Justice and Home Affairs on the basis of the annual financing decision of DG JLS/HOME for agencies (2010 financing decision on procurement and subsidies for the Community bodies referred to in Article 185 of Council regulation (EC, Euratom) No 1605/2002, in the field of Justice, freedom and security for 2010), whereby the aim was to carry out the necessary fitting out and installation of security equipment in the EASO building that was provided by the Maltese Government.










22.


The budgetary provisions for this project were included in the EASO approved budget. The specifications of the project and estimates were part of the Grant Agreement. The Lease Agreement and project were subject of specific discussion in the Budget Committee of the European Parliament in 2011.










23.


Transparency in recruitment procedures has been improved. Upon EASO's administrative and financial independence, new selection/recruitment practices have been introduced. These practices are also stated in the EASO Recruitment Policy.