Source: EURLEX
Language: en
Format: md

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| 1.12.2016 | EN | Official Journal of the European Union | C 449/1 |

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Summary of results from the Court’s annual audits of the European Agencies and other bodies for the financial year 2015

(2016/C 449/01)

CONTENTS

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|  | Paragraph | Page |
| INTRODUCTION | 1 | 1 |
| INFORMATION IN SUPPORT OF THE COURT’S OPINIONS | 11 | 2 |
| AUDIT RESULTS |  | 3 |
| |  |  | | --- | --- | |  | Opinions on the reliability of the accounts | | 15 | 3 |
| |  |  | | --- | --- | |  | Opinions on the legality and regularity of the transactions underlying the accounts | | 17 | 3 |
| |  |  | | --- | --- | |  | Other matter — event after balance sheet date | | 19 | 4 |
| |  |  | | --- | --- | |  | Comments made in the SARs | | 20 | 4 |
| |  |  | | --- | --- | |  | Follow-up of previous years’ comments | | 27 | 5 |
| CONCLUSIONS | 29 | 5 |
| |  |  | | --- | --- | | ANNEX I — | Agencies’ budget and staff | | | 6 |
| |  |  | | --- | --- | | ANNEX II — | Comments made by the Court, not calling its opinions into question | | | 11 |
| |  |  | | --- | --- | | ANNEX III — | Follow-up of open comments not calling the Court’s opinions into | | | 14 |

INTRODUCTION

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|  | 1. | Pursuant to Article 287 of the Treaty on the Functioning of the European Union[(1)](#ntr1-C_2016449EN.01000101-E0001), the European Court of Auditors (Court) has audited and issued opinions on the reliability of the accounts and on the legality and regularity of the underlying transactions, for the financial year ended 31 December 2015 for 41 agencies, offices and bodies (agencies) and the Europol Pension Fund (EPF). |

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| |  |  |  | | --- | --- | --- | |  | 2. | This summary provides an overview of the results of these audits. It aims to facilitate the analysis and comparison of the Court’s Specific Annual Reports (SARs). The Court’s opinions and comments as well as the replies to them can be found in the respective SARs. This summary is not an audit report or opinion. | |

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|  | 3. | Agencies are highly visible in the Member States and have significant influence on policy and decision making and programme implementation in areas of vital importance to European citizens, i.e. health, safety, security, freedom and justice. Depending on their task, set-up and financing, distinction can be made between decentralised agencies, executive agencies, self-financed agencies and other bodies. |

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|  | 4. | The 30 decentralised agencies play an important role in implementing EU policies, especially tasks of a technical, scientific, operational and/or regulatory nature. Their aim is to allow the Commission to concentrate on policy-making and to reinforce cooperation between the EU and national governments by pooling technical and specialist expertise from both sides. They are located throughout the EU. |

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|  | 5. | The six executive agencies are entrusted with tasks relating to the management of one or more Union programmes and are set up for fixed periods of time. They are located in Brussels (five) and Luxembourg (one). |

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|  | 6. | The three self-financed agencies comprise the Office for Harmonization in the Internal Market (OHIM)[(2)](#ntr2-C_2016449EN.01000101-E0002), the Community Plant Variety Office (CPVO) and the Single Resolution Board (SRB)[(3)](#ntr3-C_2016449EN.01000101-E0003). The SRB in Brussels became fully operational as of 1 January 2016 with the mission to ensure the orderly resolution of failing banks, minimising the impact on the real economy and on public finances. |

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|  | 7. | The other bodies comprise the European Institute of Innovation and Technology (EIT), the Euratom Supply Agency (Euratom) and the Europol Pension Fund (EPF). The EIT in Budapest is an independent, decentralised EU body which pools scientific, business and education resources to boost the Union’s innovation capacity. The Euratom in Luxembourg was created to support the aims of the European Atomic Energy Community Treaty. The EPF, which is located in The Hague, was established to finance and pay pensions for staff employed by the European Police Office (Europol) before it became an agency on 1 January 2010. The EPF has been dissolved as of 1 January 2016. |

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|  | 8. | The agencies’ total 2015 budget amounted to some 2,8 billion euros (2014: 2,6 billion euros) or about 2,0 % of the 2015 EU general budget (2014: 1,9 %). The major part of the agencies’ budget is funded through the Commission’s subsidies; the rest is income from fees and other sources. |

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|  | 9. | By the end of 2015 the agencies employed 9 965 staff (2014: 9 379)[(4)](#ntr4-C_2016449EN.01000101-E0004). The number of staff increased the most in agencies dealing with migration matters (European Asylum Support Office — EASO) and the prevention of serious crime and terrorism (Europol). The executive agencies where the staff number went up have an extended mandate and obtained additional responsibilities. |

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|  | 10. | Details on the agencies, their budgets and staff are provided in Annex I. |

INFORMATION IN SUPPORT OF THE COURT’S OPINIONS

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|  | 11. | The arrangements for the audit of agencies’ accounts are presented in the Table.  Table  Audit arrangements for agencies’ accounts   |  |  |  |  | | --- | --- | --- | --- | | Agencies | Audited by | | Total | | Court | Court + audit firm | | Decentralised agencies | — | 30 | 30 | | Executive agencies | 6 | — | 6 | | Self-financed agencies | 2 | 1[(5)](#ntr5-C_2016449EN.01000101-E0005) | 3 | | Other bodies | 2[(6)](#ntr6-C_2016449EN.01000101-E0006) | 1 | 3 | | Total | 10 | 32 | 42 | |

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|  | 12. | The annual accounts of 32 agencies were verified by an independent external auditor (audit firm) according to Article 208(4) of the EU Financial Regulation[(7)](#ntr7-C_2016449EN.01000101-E0007) and Article 107(1) of the framework financial Regulation for agencies[(8)](#ntr8-C_2016449EN.01000101-E0008). The Court’s opinions on these accounts considered the audit work performed by the audit firm and the action taken in response to their observations. The Court has reviewed the work of the audit firms in accordance with international audit standards. This review provided adequate assurance for the Court to base its own audit opinions on the reliability of the accounts using the audit firms’ work. |

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|  | 13. | For the remaining nine agencies and the EPF, the Court continued to perform the audit of the reliability of the accounts. The audit work covered compliance with the applicable accounting rules, completeness and accuracy of balance-sheet and budget figures and an analysis of the statement of financial performance and of the budget implementation. |

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|  | 14. | As in prior years the Court remained exclusively responsible for the audit of the legality and regularity of the transactions underlying the accounts of all agencies and the EPF. The audit approach comprised analytical audit procedures, direct testing of transactions and an assessment of the agencies’ internal controls. |

AUDIT RESULTS

Opinions on the reliability of the accounts

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|  | 15. | The final accounts of 40 agencies and the EPF present fairly, in all material respects, their financial position as at 31 December 2015 and the results of their operations and their cash flows for the year then ended, in accordance with the provisions of the applicable Financial Regulations and the accounting rules adopted by the Commission’s Accounting Officer. |

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|  | 16. | The Court issued a qualified opinion on the reliability of Frontex’ final accounts for the financial year 2015. The qualification is based on a material underestimation of accrued charges by 1,7 million euros. |

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

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|  | 17. | The Court concluded that for the 40 agencies and the EPF, the transactions underlying the annual accounts for the year ended 31 December 2015 were legal and regular in all material respects. |

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|  | 18. | The Court issued a qualified opinion on the legality and regularity of the transactions underlying the EIT’s accounts. The qualification was primarily based on the use of an irregular flat rate related to grants. |

Other matter — event after balance sheet date

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|  | 19. | The Court presented an event that took place after balance sheet date in an ‘Other matter’ paragraph in the SARs of the European Banking Authority (EBA) and of the European Medicines Agency (EMA), which are both located in London. This paragraph deals with the United Kingdom (UK) referendum that took place on 23 June 2016 and clarifies that the accounts and related notes of the two agencies were prepared using the information available at the date of signing of their accounts when the result of UK citizens’ vote were not yet known and the formal notification of the triggering of Article 50 of the Treaty on European Union has not been presented[(9)](#ntr9-C_2016449EN.01000101-E0009). |

Comments made in the SARs

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|  | 20. | Without calling its opinions into question, the Court made a total of 90 comments (2014: 79) affecting 36 agencies and the EPF (2014: 35) to highlight matters of importance and to indicate room for improvement. The number of comments made under the different headings of the SARs is shown in the Chart.  Chart  Comments by SAR heading Image Source: SARs on the agencies annual accounts for the financial year 2015 |

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|  | 21. | An overview of the comments made for each of the agencies and the EPF is provided in Annex II. |

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|  | 22. | The comments considered to be of particular interest are outlined below. They cover matters of importance which are frequent and/or severe and of wider interest (‘lessons to be learnt’). |

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|  | 23. | A high level of  carry-overs  of committed appropriations remains the most frequent comment and concerns 32 agencies (2014: 28). The carry-overs under title II (administrative expenditure) of the 22 agencies concerned (2014: 18) on average amounted to 36 % (2014: 39 %) of committed appropriations, carry-overs under title III (operational expenditure) of the 18 agencies concerned (2014: 18) on average amounted to 48 % (2014:56 %) of committed appropriations. These carry-overs mainly result from events (partly) beyond the agencies’ control (e.g. invoices or cost declarations that had not been received by the year end) or are explained by the multi-annual nature of operations, procurement procedures or projects. The Court continued to report on these matters following its internally defined threshold for the different titles of the agencies’ budget. A change of this reporting procedure requires a common understanding of the main parties involved (Court, Parliament, Council and the agencies) as to what should be reported in the agencies’ SARs on carry-overs. In this context it would be beneficial to elaborate an agreed upon concept of a ‘justified carry-over’ and to implement this concept in the agencies. |

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|  | 24. | The basic rule underlying  public procurement  is to ensure competition between economic operators. The Court reported in four SARs that agencies had not fully complied with this rule. It referred to the use going beyond of what can be considered exceptional of a negotiated procedure without publication of a contract notice and highlighted the absence of competition in case of the use of framework contracts where the services requested or individual prices have not been clearly defined. |

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|  | 25. | Business continuity  encompasses planning and preparation to ensure the continuation of operations in case of serious incidents or disasters and the ability to recover to an operational state within a reasonably short period. The Court found that four agencies do not yet fully comply with the  internal control  standard dealing with this matter. |

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|  | 26. | The agencies’ audited annual accounts comprise the financial statements and the budgetary implementation reports. The Court reported that the  budgetary implementation reports  of three agencies differ from the  level of detail  provided by most other agencies which hampers comparison between agencies and affects their informative value. The Commission has planned to issue guidelines on this matter. |

Follow-up of previous years’ comments

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|  | 27. | The SARs for financial year 2015 provide an overview of follow-up actions taken by the agencies in response to comments from previous years. Annex III shows that for the 134 comments open at the end of 2014 (2013: 153), corrective action was completed in 37 cases during 2015. The corrective actions were ongoing for 44 cases and outstanding for nine cases. No corrective action was required for 44 comments, mainly in relation to carry-overs of committed appropriations. |

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|  | 28. | Whilst the overall situation has improved compared to the previous year (number of open comments decreased) the number of outstanding corrective actions increased by three comments. An outstanding action implies that no action is planned or ongoing. In five of the nine cases, the implementation of the required corrective actions depends on the contribution of a third party (e.g. the hosting Member State, a Court or the legislator) and is beyond the agencies’ control. In three of the remaining four comments, the agencies concerned (CPVO and EASO) have not yet taken effective action and in one case, the agency (EIT) does not agree with the Court’s observation and has not planned any further specific corrective actions. |

CONCLUSIONS

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|  | 29. | The Court issued an unqualified opinion on the annual accounts of all agencies except Frontex. The transactions underlying the agencies’ accounts were legal and regular for all agencies except for EIT for which the Court has issued a qualified opinion. |

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|  | 30. | Agencies further improved their procedures by taking corrective action in response to the Court’s comments from previous years. Nevertheless, there is still room for improvement, as indicated by comments made in 2015. |

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