Annual accounts of the European Court of Auditors for the financial year 2016
Date: 2017-05-24
Institutions: European Court of Auditors
Subjects: administration of the Institutions, auditing, budgetary control, financial control








C_2017371EN.01000201.xml










31.10.2017   


EN


Official Journal of the European Union


C 371/2





ANNUAL ACCOUNTS OF THE EUROPEAN COURT OF AUDITORS FOR THE FINANCIAL YEAR 2016
(2017/C 371/02)

TABLE OF CONTENTS






Certification of the accounts
3








Independent auditor’s report
4








Financial statements and explanatory notes
5








Balance Sheet
5








Statement of Financial Performance
6








Cash Flow Statement
7








Statement of changes in Net Assets
7








Accounting policies and notes to the financial statements
8










1.

General
8










2.

Legal basis and accounting rules
8










3.

Notes to the Balance Sheet
10










4.

Notes to the Statement of Financial Performance
12










5.

Other significant disclosures
13








Budget information financial year 2016
15










A

Computation of the budget result
15










B

Reconciliation of economic result with budget result
16








Independent assurance report
17




CERTIFICATION OF THE ACCOUNTS


Certification for the annual accounts 2016 of the European Court of Auditors

The annual accounts of the European Court of Auditors for the year 2016 have been prepared in accordance with the Title IX of the Financial Regulation applicable to the general budget of the European Union, the accounting rules adopted by the Commission’s Accounting Officer and the accounting principles and methods adopted by myself.
I acknowledge my responsibility for the preparation and presentation of the annual accounts of the European Court of Auditors in accordance with Article 68 of the Financial Regulation.
I have obtained from the authorising officer, who certified its reliability, all the information necessary for the production of the accounts that show the European Court of Auditors’ assets and liabilities and the budgetary implementation.
I hereby certify that based on this information, and on such checks as I deemed necessary to sign off the accounts, I have a reasonable assurance that the accounts present fairly, in all material aspects, the financial position, the results of the operations and the cash-flow of the European Court of Auditors.

Luxembourg, 24 May 2017.

Isidoro RODRÍGUEZ DE LAS PARRAS

Accounting Officer of the European Court of Auditors





AUDIT REPORT

To the Management of


European Court of Auditors

We have audited the accompanying financial statements of the European Court of Auditors, which comprise the balance sheet as at 31 December 2016, the statement of its financial performance, its cash flow statement and the statement of changes in net assets for the year then ended and a summary of significant accounting policies and other explanatory information, and which starts on page 6 and ends on page 18.


Management’s responsibility for the financial statements


The Management is responsible for the preparation and fair presentation of these financial statements in accordance with Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, p. 1), hereinafter referred to as the ‘Financial Regulation’; and with the Commission Delegated Regulation (EC) No 1268/2012 of 29 October 2012 on the rules of application of the Financial Regulation, and for such internal control as the Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


Responsibility of the ‘Réviseur d’entreprises agréé’


Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing as adopted for Luxembourg by the ‘Commission de Surveillance du Secteur Financier’. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the judgment of the ‘Réviseur d’entreprises agréé’, including the assessment of the risks of material misstatement of the annual accounts, whether due to fraud or error. In making those risk assessments, the ‘Réviseur d’entreprises agréé’ considers internal control relevant to the entity’s preparation and fair presentation of the annual accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.


Opinion


In our opinion, the financial statements give a true and fair view of the financial position of the European Court of Auditors as of 31 December 2016, and of its financial performance, its cash flows and the changes in net assets for the year then ended in accordance with the Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, p. 1), hereinafter referred to as ‘the Financial Regulation’; and with the Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application of the Financial Regulation.

Luxembourg, 24 May 2017.


PricewaterhouseCoopers, Société coopérative


Represented by

Rima ADAS





FINANCIAL STATEMENTS AND EXPLANATORY NOTES (1)


Balance Sheet









(euro)




 


Note


31 December 2016


31 December 2015





Non-Current Assets



 


 


 




Intangible assets


3.1.


3 530 432 


5 021 023 




Property, plant and equipment


3.2.


78 146 338 


83 145 082 




Receivables


 


—


—




 


 



81 676 770 




88 166 105 






Current Assets



 


 


 




Receivables


3.3.


691 455 


604 313 




Cash and cash equivalents


3.4.


8 356 341 


7 215 048 




 


 



9 047 796 




7 819 361 





Total Assets


 


90 724 566 


95 985 466 





Current Liabilities



 


 


 




Provisions


 


—


50 000 




Payables


3.5.


5 354 888 


6 982 008 




 


 



5 354 888 




7 032 008 





Total Liabilities


 


5 354 888 


7 032 008 





Net Assets



 



85 369 678 




88 953 458 





Accumulated surplus/deficit


 


88 953 458 


97 320 516 




Economic result for the year


 


(3 583 780 )


(8 367 058 )





Net Assets



 



85 369 678 




88 953 458 






Statement of Financial Performance









(euro)




 


Note


2016


2015




Funds transferred from the Commission to other institutions


4.1.


116 700 000 


106 700 000 




Revenue from administrative operations


4.2.


20 234 812 


19 326 442 




Other operating revenue


4.3.


49 328 


90 141 




Total operating revenue


4.4.


136 984 140 


126 116 583 




Staff expenses


4.5.


(112 410 058 )


(106 959 858 )




Assets related expenses


4.6.


(7 764 105 )


(6 957 504 )




Other administrative expenses


4.7.


(20 351 775 )


(20 519 950 )




Operational expenses


4.8.


(25 270 )


(31 295 )




Total operating expenses


 


(140 551 208 )


(134 468 607 )





Surplus/(deficit) from operating activities



 



(3 567 068 )




(8 352 024 )





Financial revenue


4.9.


—


14




Financial expenses


4.10.


(16 712 )


(15 048 )





Surplus/(deficit) from non-operating activities



 



(16 712 )




(15 034 )






Economic result of the year



 



(3 583 780 )




(8 367 058 )






Cash Flow Statement








(euro)




 


2016


2015





Economic result of the year




(3 583 780 )




(8 367 058 )






Operating activities — Adjustments



 


 




Amortisation


1 600 449 


831 765 




Depreciation


6 146 461 


6 120 197 




(Increase)/decrease in Provisions


(50 000 )


22 750 




Increase/(decrease) in Receivables


(87 142 )


153 611 




(Increase)/decrease in Payables


(1 627 120 )


(46 134 )






Net cash flow from operating activities





2 398 868 




(1 284 869 )






Cash flows from investing activities



 


 




Purchase of property, plant and equipment and intangible assets (-)


(1 274 770 )


(1 688 898 )




Proceeds from property, plant and equipment and intangible assets (+)


17 195 


5 542 






Net cash flow from investing activities





(1 257 575 )




(1 683 356 )







Increase/(decrease) in Employee benefits




—


—





Net increase/(decrease) in cash and cash equivalents




1 141 293 




(2 968 225 )






Cash and cash equivalents at the beginning of the year



7 215 048 


10 183 273 





Cash and cash equivalents at the end of the year



8 356 341 


7 215 048 





Statement of changes in Net Assets









(euro)




Net assets


Accumulated Surplus/(Deficit)


Economic result of the year


Total





Balance as at 31.12.2015




97 320 516 




(8 367 058 )




88 953 458 





Allocation of the prior year economic result



(8 367 058 )



8 367 058 


—




Economic result of the year


—


(3 583 780 )


(3 583 780 )





Balance as at 31.12.2016




88 953 458 




(3 583 780 )




85 369 678 






Accounting policies and notes to the financial statements

1.   
General


The European Court of Auditors (hereafter the ‘Court’) was established by the Treaty of Brussels of 22 July 1975 and started operating in October 1977, with its headquarters in Luxembourg.






Mission of the European Court of Auditors

The European Court of Auditors mission is to contribute to improving EU financial management, promote accountability and transparency, and act as the independent guardian of the financial interests of the citizens of the Union. The ECA’s role as the EU’s independent external auditor is to check that EU funds are correctly accounted for, are raised and spent in accordance with the relevant rules and regulations and have achieved value for money.
The ECA checks if the budget of the European Union has been implemented correctly, and that EU funds have been raised and spent legally and in accordance with the principles of sound financial management.
The ECA is the EU institution for auditing the EU’s finances and is committed to being an efficient organisation at the forefront of developments in public audit and administration.




The financial year of the Court runs from 1 January to 31 December.
2.   
Legal basis and accounting rules


2.1.   Basis of presentation

The financial statements of the Court are drawn up in accordance with Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (1) hereinafter referred to as the ‘Financial Regulation’ and Commission Delegated Regulation (EU) No 1268/2012 (2) laying down detailed rules of application of this Financial Regulation.
2.2.   Accounting principles

The financial statements are prepared on the basis of accrual-based accounting rules that are based on International Public Sector Accounting Standards (IPSAS). These EU Accounting Rules are adopted by the Accounting Officer of the Commission after a consultation of the other institutions.
The accounting principles to be followed when preparing the financial statements are laid down in EU accounting rule 1 ‘Financial Statements’ and are the same as those described in IPSAS 1, that is: fair presentation, accrual basis, going concern, consistency of presentation, aggregation, offsetting and comparative information. The qualitative characteristics of financial reporting according to Article 144 of the Financial Regulation are relevance, reliability, understandability and comparability.
In accordance with IPSAS and generally accepted accounting principles, the financial statements necessarily include amounts based on estimates and assumptions by management based on the most reliable information available.
2.3.   Currency and basis for conversion

The financial statements are presented in euro, the euro being the EU’s functional and reporting currency.
Foreign currency transactions are translated into euro using the exchange rate prevailing at the date of the transaction.
Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of financial performance.
Year-end balances of monetary assets and liabilities denominated in foreign currencies are converted into euro on the basis of the exchange rates on 31 December.
2.4.   Intangible assets

Acquired computer software licences are stated at historical cost less accumulated amortisation and impairment losses. The assets are amortised on a straight-line basis over four years. Internally developed intangible assets are capitalised when the relevant criteria of the EU accounting rules are met. The costs that can be capitalised include all directly attributable costs necessary to create, produce, and prepare the asset to be capable of operating in the manner intended by the Court management. Costs associated with research activities, not capitalised development costs and maintenance costs are recognised as expenses as incurred.
2.5.   Property, plant and equipment

All property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition or construction of the asset.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits or service potential associated with the item will flow to the Court and its cost can be measured reliably. Repairs and maintenance costs are charged to the statement of financial performance during the financial period in which they are incurred. As the Court does not borrow money to fund the acquisition of property, plant and equipment, there are no borrowing costs related to such purchases.
Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
Land and works of art are not depreciated as they are deemed to have an indefinite useful life. Assets under construction are not depreciated as these assets are not yet available for use. Depreciation on other assets is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:






Buildings


4 %




Plant, machinery and tools


12,5  % to 25 %




Furniture and vehicle fleet


10 % to 25 %




Computer hardware


25 %




Other fixtures and fittings


12,5  % to 25 %




2.6.   Provisions

Provisions are recognised when the Court has a present legal or constructive obligation towards third parties as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognised for future operating losses. The amount of the provision is the best estimate of the expenditures expected to be required to settle the present obligation at the reporting date.
2.7.   Recognition of expenses

According to the EU accounting rules, transactions and events are recognised in the financial statements in the period to which they relate. At the end of the accounting period, accrued expenses are recognised based on an estimated amount of the transfer obligation of the period. The calculation of accrued expenses is done in accordance with detailed operational and practical guidelines issued by the Accounting Officer which aim at ensuring that the financial statements reflect a true and fair view.
2.8.   Contingent Liabilities

A contingent liability is a possible obligation that arises from past events and of which the existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the EU; or a present obligation that arises from past events but is not recognised because: it is not probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation or in the rare circumstances where the amount of the obligation cannot be measured with sufficient reliability.
3.   
Notes to the Balance Sheet



NON-CURRENT ASSETS

3.1.   Intangible assets

The movements in intangible assets during the year 2016 were:






(euro)




Gross carrying amounts at 31.12.2015


7 667 601 




Additions


109 858 




Disposals


—




Transfer between asset categories


—




Other changes


—





Gross carrying amounts 31.12.2016




7 777 459 





Accumulated amortisation at 31.12.2015


(2 646 578 )




Amortisation charge for the year


(1 600 449 )




Amortisation written back


—




Disposals


—




Transfer between asset categories


—





Accumulated amortisation at 31.12.2016




(4 247 027 )






Net carrying amounts 31.12.2016




3 530 432 





Net carrying amounts 31.12.2015


5 021 023 




The above amounts relate primarily to computer software.
In 2016 no costs associated with research activities were recognised.
3.2.   Property, Plant and Equipment

The movements in Property, plant and equipment during the year 2016 were:












(euro)




 


Land and Buildings


Plant and equipment


Furniture and vehicle


Computer hardware


Other fixtures and fittings


Tangible assets under construction


Total




Gross carrying amounts at 31.12.2015


125 117 299 


885 583 


4 881 674 


4 092 395 


2 261 979 


—


137 238 930 




Additions


62 007 


61 727 


378 085 


527 504 


126 589 


9 000 


1 164 912 




Disposals


—


(8 050 )


(36 904 )


(198 485 )


(125 611 )


—


(369 050 )




Transfer between asset categories


—


—


—


—


—


—


—




Other changes


—


—


—


—


—


—


—





Gross carrying amounts 31.12.2016




125 179 306 




939 260 




5 222 855 




4 421 414 




2 262 957 




9 000 




138 034 792 





Accumulated depreciation at 31.12.2015


(46 453 274 )


(641 813 )


(2 480 283 )


(2 847 133 )


(1 671 344 )


—


(54 093 847 )




Depreciation charge for the year


(4 608 357 )


(120 064 )


(456 007 )


(746 416 )


(215 617 )


—


(6 146 461 )




Depreciation written back


—


7 595 


32 035 


190 708 


121 517 


—


351 855 




Disposals


—


—


—


—


—


—


—




Transfer between asset categories


—


—


—


—


—


—


—





Accumulated depreciation at 31.12.2016




(51 061 631 )




(754 282 )




(2 904 255 )




(3 402 841 )




(1 765 444 )



—



(59 888 453 )






Net carrying amounts 31.12.2016




74 117 675 




184 978 




2 318 600 




1 018 573 




497 513 




9 000 




78 146 339 





Net carrying amounts 31.12.2015


78 664 025 


243 770 


2 401 391 


1 245 262 


590 635 


—


83 145 083 





CURRENT ASSETS

3.3.   Receivables








(euro)




 


31 December 2016


31 December 2015




Current receivables mainly due to the transfer of national pension rights by staff


(4 123 )


3 795 




Sundry receivables mainly related to payroll and mission advances


134 738 


66 833 




Deferred charges for building rentals and IT contracts


551 166 


533 685 




Receivables from EU entities


9 674 


—




Total


691 455 


604 313 




3.4.   Cash and cash equivalents








(euro)




 


31 December 2016


31 December 2015




Petty cash


1 000 


1 000 




Bank current account


1 447 332 


180 564 




Fiduciary account


6 908 009 


7 033 484 




Total


8 356 341 


7 215 048 




A fiduciary account was opened on 27 January 2010 by the European Court of Auditors with the Banque et Caisse d’Épargne de l’État, Luxembourg. This fiduciary account allowed the Court to manage the budget granted by the budgetary authority in relation to the K3 building project (see Note 5.3). On 14 March 2014, the Court requested the European Parliament and Council to allow the use of the estimated remaining budget of the K3 project (7 million euro) for the necessary and compulsory technical upgrade of the Court’s K2 building. This proposal was approved by the European Parliament and Council on 1 April 2014. On 23 March 2015, the Court announced to the European Parliament and Council that the final remaining budget of the K3 project amounted to 9,4 million euro and, as the estimated cost for the K2 upgrade was 7 million euro, on 12 May 20152,4 million euro were returned to the EU budget. The payments for the K2 building effected in 2016 amount to 125 475,01 euro.

CURRENT LIABILITIES

3.5.   Payables








(euro)




 


31 December 2016


31 December 2015




Current payables


88 815 


61 781 




Sundry payables related to payroll and staff


(14 199 )


(30 952 )




Accrued charges


5 148 263 


6 791 296 




Accounts payable to consolidated EU entities mainly to the European Council and Parliament


132 009 


159 883 




Total


5 354 888 


6 982 008 




4.   
Notes to the Statement of Financial Performance










4.1.


‘Funds transferred from the Commission to other institutions’: the amount corresponds to the monthly calls for funds made by the Court to the Commission to replenish its bank account.












4.2.


‘Revenue from administrative operations’: for the most part, this heading is made up of deductions from the salaries of members and staff in respect of tax and social contributions.












4.3.


‘Other operating revenue’ arises among others from exchange rate gains.












4.4.


Revenues were generated from exchange and non-exchange transactions as follows:







(euro)




 


2016


2015




Revenue from exchange transactions


59 002 


90 155 




Revenue from non-exchange transactions


136 925 138 


126 026 442 




Total revenue


136 984 140 


126 116 597 
















4.5.


‘Staff expenses’ include the salaries of members, statutory staff, contractual agents and temporary staff.












4.6.


The ‘Assets related expenses’ consist of the depreciation/amortisation of the tangible and intangible assets.












4.7.


The most significant items of the ‘other administrative expenses’ were:










—


IT and telecommunications










—


Missions expenses










—


Cleaning and security services.












4.8.


‘Operational expenses’ arise among others from exchange rate losses.












4.9.


‘Financial revenue’ consists of bank interest earned on the Court’s current and fiduciary accounts.












4.10.


‘Financial expenses’ are bank charges levied on the Court’s current and fiduciary accounts.




5.   
Other significant disclosures


5.1.   Contingent assets

The following bank guarantees have been given by suppliers following contractual obligations:







(euro)




 


31 December 2016


31 December 2015




Renovation building


251 139 


80 353 




Project management building K3


10 339 


110 339 




Insurance company


1 361 


1 361 




Telecommunication


20 000 


20 000 




EMAS methodological support


4 680 


4 680 




Total


287 519 


216 733 




5.2.   Commitments for future funding








(euro)




 


31 December 2016


31 December 2015




Operational lease for Buildings


875 000 


797 500 




Operational lease for IT material, cars and other equipment


2 156 313 


1 350 635 




Subtotal


3 031 313 


2 148 135 




Commitments against appropriations not yet consumed — RAL (‘Restant à liquider’) -, after deduction of accruals for 2016


8 166 271 


7 253 338 




Total


11 197 584 


9 401 473 




The RAL is an element of budgetary accounting representing the value of outstanding commitments. This is the difference between commitments entered into and payments, which is due to the time-lag between entering into a commitment and proceeding to the related payment.
5.3.   The Court’s buildings projects

The Court occupied its headquarters building (the ‘K1’ building) in 1988 and purchased it and the land it stands on outright in 1990. In 1999, the Court signed a framework agreement with the Luxembourg State through which it was given the right to use a second parcel of land for 49 years (renewable once) for the construction of an extension (the ‘K2’ building) in return for a payment of one euro. However for the second extension, the ‘K3’ building, due to different arrangements for carrying out the project it was necessary that the Luxembourg State and the Court concluded a new framework agreement on 22 February 2008.
As regards the two pieces of land relative to the two extensions (‘K2’ and ‘K3’) mentioned above, the state has sold these to the Court for a symbolic one euro.
For its part should the Court ever consider ceding one or other of the buildings to a third party other than the Union body or institution, the Court will return the land to the ownership of the State in return for a symbolic one euro, the latter disposing also of an option to buy the building at a price to be determined by an independent expert. In case the state decides not to exercise this option, it would provide a right to use the land to the purchasers of the building.
5.4.   Contingent liabilities

There are no contingent liabilities.


(1)  The accompanying notes form an integral part of these financial statements.

(1)  OJ L 298, 26.10.2012, p. 1.

(2)  OJ L 362, 31.12.2012, p. 1.



BUDGET INFORMATION FINANCIAL YEAR 2016
A.   Computation of the budget result

The budget result of the year is computed based on the figures of the budgetary implementation.






(euro)




Payments on appropriations of the year 2016


(126 932 174 )




Payments made from carry over of payment appropriations


(8 724 144 )




Payments on appropriation related to earmarked revenue


(24 845 )




Recovery orders of the year, cashed during the year 2016


20 272 767 




Budgetary recovery orders issued before 2016 and cashed in the year 2016


6 250 




Adjustment on recovery orders from previous years


—




Payment appropriations carried over to 2016


(9 303 863 )




Appropriation carried over from previous years


9 235 061 




Adjustment for carry-over from previous year of appropriations available at 31.12 arising from assigned revenue


62 478 




Budget result


(115 408 470 )




B.   Reconciliation of economic result with budget result








(euro)





Economic result of the year




(3 583 780 )






Adjustment for items included in the economic result but not in the budget result




(101 600 197 )





 


Difference between accruals end of previous year and end of current year


(1 274 563 )




 


Amount from liaison account with the Commission booked in the Economic Outturn Account


(116 700 000 )




 


Unpaid invoices at year end but booked in charges (class 6)


(407 496 )




 


Depreciation of intangible and tangible assets


7 989 618 




 


Provisions


—




 


Value reductions


—




 


Recovery orders issued in 2016 in class 7 not yet cashed


—




 


Payments made from carry over of payment appropriations


8 724 144 




 


Other


85 193 




 


Exchange rate differences


(17 093 )





Adjustment for items included in the budget result but not in the economic result




(10 224 493 )





 


Asset acquisitions (paid during the year)


(1 500 283 )




 


Budgetary recovery orders issued before 2016 and cashed in the year


6 250 




 


Payment appropriations carried over to 2016


(9 303 863 )




 


Cancellation of unused carried over payment appropriations from previous year


510 917 




 


Adjustment for carry-over from previous year of appropriations available at 31.12 arising from assigned revenue


62 479 




 


Payments for pensions (they are budgetary payments but booked against provisions)


—




 


Other


7




Budget result


(115 408 470 )







INDEPENDENT ASSURANCE REPORT

To the Management of the


European Court of Auditors

We have examined that the financial resources assigned by the European Commission to the European Court of Auditors (hereafter the ‘Court’) have been used for their intended purposes and that the control procedures put in place by the authorising officers provide the necessary guarantees to ensure the compliance of financial operations with the applicable rules and regulations for the financial resources made available and used for the period from 1 January 2016 to 31 December 2016.
The maintenance of books and records and the establishing and maintaining of appropriate controls are the responsibility of the Management of the Court. Our responsibility is to express our opinion based on our examination.
We conducted our examination in accordance with the International Standard on Assurance Engagements ‘Assurance Engagements other than Audits or Reviews of Historical Financial Information’ (ISAE 3000) as adopted by the ‘Commission de Surveillance du Secteur Financier’. This standard requires that we plan and perform our examination such that misuse of the resources materially affecting the books of the Court are detected with reasonable assurance. Our work consisted primarily of examining on a test and sample basis, evidence supporting the fact that:






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The resources assigned to the Court have been used for their intended purposes;










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The control procedures put in place provide the necessary guarantees to ensure the compliance of financial operations with the applicable rules and regulations.




The criteria used for our examination are the following rules and regulations:






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Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget (hereafter the ‘Budget’) of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (hereafter the ‘Financial Regulation’);










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Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (hereafter the ‘Implementing Rules’);










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Rules of Procedure of the Court of Auditors of 11 March 2010, in particular Article 15 thereof, and to Decision No 26-2010 of 11 March 2010 as amended by the Court on 3 April 2014 laying down the rules for implementing the Rules of Procedure, in particular Article 38 of that Decision;










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Decision No 54-2016 of the European Court of Auditors concerning the internal rules for the implementation of its Budget of 12 September 2016. These provisions form part of the procedures established by the Treaties, or agreements made by virtue thereof, which concern the operational process linked to the implementation of the Budget.




In particular, the following Internal Rules have been used as criteria:






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Article 7.1 — Signatures — ‘Each of the parties involved in the drafting, control and registration of operations to establish and recover revenue or to commit sums and make payments shall sign and date their involvement’;










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Article 8 — Building projects — ‘The President shall present to the European Parliament and the Council any building project likely to have significant financial implications for the Court’s budget. Before the Court gives its approval to any contractual undertaking concerning such a project, the service responsible shall submit an explanatory document justifying the compatibility of the project with the financial framework’;










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Article 11.2 — ‘Before signing, the persons empowered to sign bank credit transfer orders shall verify, in particular, that the bank credit transfer orders correspond to the payment orders’;










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Article 17.2 — ‘The request for transfer shall be accompanied by the information enumerated in Article 17.2’;










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Article 18.4 — ‘The Accounting Officer shall make available to the authorising officers, via the central IT system, a list of amounts to be carried over. The authorising officers shall be responsible for ensuring that, at the end of the year, the only amounts carried over are those in respect of which there is a legal obligation to do so’;










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Article 20.1 — Property inventories — ‘An inventory of tangible assets shall be kept in a database common to all the authorising officers in accordance with the procedures laid down by the Secretary-General, after consulting the Accounting Officer’;










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Article 22.1 — Minimum management and internal control procedures — ‘The management and internal control procedures shall be drawn up by the authorising officers in accordance with the minimum internal control standards adopted by the Court’.




We believe our examination provides a reasonable basis for our opinion.
Based on our work described in this report, nothing has come to our attention that causes us to believe that in all material respects and based on the criteria described above:






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The resources assigned to the Court have not been used for their intended purposes;










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The control procedures in place do not provide the necessary guarantees to ensure the compliance of financial operations with the applicable rules and regulations.




Our report is solely for the purpose set forth in the first paragraph and for your information and is not to be used for any other purpose or to be distributed to any other parties, except for publication purpose in the European Official Journal.

Luxembourg, 24 May 2017.


PricewaterhouseCoopers, Société coopérative


Réviseur d’entreprises


Represented by

Rima ADAS