REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL under Article 213 of Regulation (EU, Euratom) N° 966/2012 on the Accounting Officer and Internal Auditor of the European External Action Service (EEAS)
Date: 2014-01-06
Institutions: European Commission
Subjects: European External Action Service, audit, management audit













EUR-Lex - 52013DC0936 - EN











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52013DC0936

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL under Article 213 of Regulation (EU, Euratom) N° 966/2012 on the Accounting Officer and Internal Auditor of the European External Action Service (EEAS) /* COM/2013/0936 final */









REPORT FROM THE COMMISSION TO THE
EUROPEAN PARLIAMENT AND THE COUNCIL
under Article 213 of Regulation (EU,
Euratom) N° 966/2012 on the Accounting Officer and Internal Auditor of the
European External Action Service (EEAS)
A. Introduction
The European External Action Service (EEAS)
has been established in 2010, by the Council decision 2010/427 pursuant article
27 (3) of the Treaty on the European Union. The 2010/427 decision provides in
recital 15 that "unnecessary duplication of tasks, functions and resources
with other structures should be avoided". Against this background, the
accounting officer and the internal auditor of the Commission have acted,
respectively, as accounting officer and internal auditor of the EEAS. The legal
bases for this arrangement are Articles 68(1) and 98(2) of the Financial
Regulation.
The Financial Regulation, in its Article 213, provides
for a review of these two Articles in 2013, which shall take "due
account of the specificity of the EEAS and, in particular, that of the Union
Delegations, and, where appropriate, an adequate financial management capacity
of the EEAS."
The Commission has assessed the functioning of the
system under which the accounting officer and the internal auditor of the
Commission act, respectively, as accounting officer and internal auditor of the
EEAS. The report at hand, on which the EEAS has been consulted, presents the
results of this assessment with the conclusion of continuing the
current arrangements.
The review referred to in Article 213 of the Financial
Regulation is independent of the review of the decision establishing the EEAS[1]: the latter review is foreseen in
Article 13(3) of the decision establishing the EEAS and concerns the
organisation and functioning of the EEAS; it is carried out under the authority
of the High Representative/ Vice-President in 2013 and may, if necessary, be accompanied by appropriate proposals for
the revision of the decision establishing the EEAS.
B. Result of the review under Article
213 FR
I. Accounting officer
As foreseen in Article 68(1) FR, the
accounting officer of the Commission has carried out a range of accounting
services for the EEAS. These services include:
–                        
Treasury (central treasury and payment run, central
bank accounts reconciliation, administrative management of imprest accounts
services, validation of 'Third Party Files' and bank accounts, management of
the early warning system),
–                        
The accounting
framework and system,
–                        
Accounting and legal
reporting,
–                        
Recovery of debts and
management of the offsetting procedure,
–                        
Quality checks on all
local accounting systems.
The cooperation between the Commission and the EEAS is
very good. Both the EEAS and the competent services in DG BUDG are very
satisfied with the current arrangements.
Economies of scales are particularly significant in
the area of treasury management, accounting and reporting. The services of the
accounting officer of the Commission have a unique expertise covering all these
aspects and in particular the treasury function. These include:
·                        
The administrative management of imprest
accounts;
·                        
The comprehensive banking architecture needed to
deal with the payment operations of the Institutions, and the related expertise
that is also employed to support local banking and payment needs of the 140 EU delegations
around the world; and
·                        
Optimised cash and risk management, and robust
business continuity procedures.
Thanks to the current arrangements the EEAS
does not need to hire additional staff. In Commission's DG Budget currently 3
posts are directly dedicated to fulfilling the new accounting and treasury
tasks linked to the EEAS, while a conservative estimate of the number of staff
needed if the EEAS were to set up its own accounting and treasury function
would be at least 15 persons.
Moreover, apart the direct treasury and
accounting functions, other horizontal activities in the field of finance and
budgetary support (such as the development and support of the Financial IT
systems, recovery services, central financial service, etc…), whose resources
have not been split at the creation of the EEAS, are currently provided by the
Commission's services on the basis of a service Level Agreement signed with the
EEAS.
This supplementary support is considered of
high quality and permits supplementary economy of scale in resources in respect
to the resources potentially needed in case of complete internalisation in the
EEAS.
Furthermore, the accounting officer of the
Commission establishes the annual accounts and deals with the Court of Auditors
relating to several other institutions. The accounting services of Commission have
established efficient procedures and good working relationships with the Court
of Auditors that the EEAS benefits from. 
In summary, to set-up a stand-alone
accounting department in the EEAS would unnecessarily increase the number of
staff employed in the two entities since each of the key tasks above would
require multiple new posts in the EEAS, while they have been already absorbed
with minimum extra resources by the Commission.
In the view of the Commission, the
cooperation should therefore be continued. No changes to the current
arrangements are deemed necessary.
II. Internal auditor
As foreseen in Article 98(2) FR, the
internal auditor of the Commission has been acting as internal auditor of the
EEAS.
The following arguments speak in favour of continuing
such arrangement.
EU-delegations manage both administrative
appropriations of the EEAS and operational appropriations from the Commission
budget. In principle, EEAS personnel only manage administrative appropriations
of the EEAS, whereas Commission personnel only manage the operational
appropriations.
However, there are exceptions to this principle: the
Head of Delegation, who belongs to the EEAS, is authorising officer by
sub-delegation regarding the operational appropriations from the Commission
budget (Article 65(6) FR). The Commission personnel support the EEAS in
managing its administrative budget, mainly through acting as initiating agents.
The consequence of these exceptions is that the two financial circuits commonly
used by Commission and EEAS staff are closely interrelated.
Because of this situation, there is a risk that
separate audits of the two financial circuits and internal control systems,
carried by different internal auditors could lead to overlapping findings or diverging
recommendations. The latter could impair the credibility of the audit work and
would also confront the responsible Authorising Officers and the Head of
Delegations with the difficulty of having to choose between two opinions on the
same subject, which would limit the value of the audit work.
Integrating internal audits would also allow for a
deeper understanding of the problems encountered in both financial circuits. It
would also help transferring knowledge gained from the audit of one circuit to
the other and exploring and realising synergies between them.
There may be arguments pleading in favour of a separate
internal auditor for the EEAS, such as the fact that if the internal auditor
acts for both the Commission and the EEAS, situations may arise for the
internal auditor in which the legitimate expectations of either institution as
service recipient might not be met. Given the existing rules and safeguards, in
particular the internal auditor's independence, this risk is, however,
adequately mitigated.
In the view of the Commission, the cooperation should
therefore be continued, with no changes to the current arrangements.
C. Conclusion
This report shows that the system under which the accounting
officer and the internal auditor of the Commission have acted, respectively, as
accounting officer and internal auditor of the EEAS, has functioned effectively
while allowing significant economies of scale. It should therefore be
maintained in the future.
The Commission will keep the European Parliament and the
Council informed about any significant developments regarding the functioning
of this system in the context of the synthesis report.
[1]               Council Decision of 26 July 2010 establishing the
organisation and functioning of the European External Action Service.