Source: EURLEX
Language: en
Format: md

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| 19.12.2006 | EN | Official Journal of the European Union | C 312/106 |

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REPORT

on the annual accounts of the Office for Harmonisation in the Internal Market for the financial year 2005 together with the Office's replies

(2006/C 312/18)

CONTENTS

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| 1-2 | INTRODUCTION |

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| 3-6 | STATEMENT OF ASSURANCE |

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| 7-11 | OBSERVATIONS |

Tables 1 to 4

The Office's replies

INTRODUCTION

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| 1. | The Office for Harmonisation in the Internal Market (hereinafter the Office) was set up by Council Regulation (EC) No 40/94[(1)](#ntr1-C_2006312EN.01010601-E0001) of 20 December 1993. Its mandate is to implement the Community legislation on trade marks and designs, which gives undertakings uniform protection throughout the entire area of the European Union. |

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| 2. | Table 1 summarises the Office's competences and activities. Key information from the financial statements drawn up by the Office for the financial year 2005 is presented in Tables 2, 3 and 4. |

STATEMENT OF ASSURANCE

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| 3. | This Statement is addressed to the Office's Budget Committee pursuant to Article 137 of Council Regulation (EC) No 40/94. |

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| 4. | The Office's accounts for the financial year ended 31 December 2005[(2)](#ntr2-C_2006312EN.01010601-E0002) were drawn up by its President, pursuant to Article 119 of Council Regulation (EC) No 40/94, and sent to the Court, which is required to give a statement of assurance on their reliability and on the legality and regularity of the underlying transactions. |

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| 5. | The Court conducted its audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |

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| 6. | The Court has thus obtained a reasonable basis for the statement expressed below. |

Reliability of the accountsThe Office's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Office's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's statement into question.

OBSERVATIONS

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| 7. | As regards budgetary implementation, the overall implementation rates for commitment and payment appropriations for the financial year were 95 % and 80 % respectively. However, the consumption of appropriations was lower for administrative expenditure (Title II): around 10 % of the appropriations for this and the previous financial year were cancelled and one third of the commitments for this financial year were carried over. This situation should prompt the Office to improve the forecasting and planning of its administrative expenditure so as to avoid mobilising funds unnecessarily. |

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| 8. | The segregation of the duties of initiation and verification of budgetary operations was not completely guaranteed. Indeed, the audit showed that dozens of commitments and several hundred payments had both been initiated and validated by one and the same employee. |

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| 9. | In 2005, the Administrative Board had still not adopted any minimum internal control standards. Furthermore, the authorising officers had not yet formalised the management and internal control procedures and systems that they were applying. This being so, the accounting officer was not in a position to validate the systems intended to provide him with information. |

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| 10. | An examination of a procedure for recruiting temporary staff showed some shortcomings: lack of a formal decision appointing selection boards, failure to specify the deadline for the submission of applications, lack of systematic use of evaluation scales, no minutes of selection board meetings, recruitment of two candidates where the vacancy notice specified only one recruitment. |

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| 11. | The audit work on procurement and contract management revealed some anomalies: a lack of precision in the contract notices as to the nature of the contracts being published (works or supplies)[(3)](#ntr3-C_2006312EN.01010601-E0003), failure to adequately justify the use of the negotiated procedure for a contract extension[(4)](#ntr4-C_2006312EN.01010601-E0004), incomplete documentation of the procedure or inadequate application of the selection and evaluation criteria provided for in the contract notices[(5)](#ntr5-C_2006312EN.01010601-E0005), award of four specific contracts for a duration that overran the expiry date of the corresponding framework contracts by 11 months. |

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

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