Source: EURLEX
Language: en
Format: md

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| 15.12.2012 | EN | Official Journal of the European Union | C 388/187 |

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REPORT

on the annual accounts of the European Police Office for the financial year 2011, together with the Office’s replies

2012/C 388/32

INTRODUCTION

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| 1. | The European Police Office (hereinafter “the Office”), which is located in The Hague, was established by Council Decision (2009/371/JHA)[(1)](#ntr1-C_2012388EN.01018701-E0001). The objective of the Office is to support and strengthen action by the Member States' police authorities and other law enforcement services and their mutual cooperation in preventing and combating serious crime affecting two or more Member States, terrorism and forms of crime which affect a common interest covered by a Union policy[(2)](#ntr2-C_2012388EN.01018701-E0002). |

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

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| 2. | 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 systems. This is supplemented by evidence provided by the work of other auditors (where relevant) and an analysis of management representations. |

STATEMENT OF ASSURANCE

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| 3. | Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union, the Court has audited the annual accounts[(3)](#ntr3-C_2012388EN.01018701-E0003) of the Office, which comprise the “financial statements”[(4)](#ntr4-C_2012388EN.01018701-E0004) and the “reports on the implementation of the budget”[(5)](#ntr5-C_2012388EN.01018701-E0005) for the financial year ended 31 December 2011, and the legality and regularity of the transactions underlying those accounts. |

The Management’s responsibility

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| 4. | As authorising officer, the Director implements the revenue and expenditure of the budget in accordance with the financial rules of the Office, under his own responsibility and within the limits of the authorised appropriations[(6)](#ntr6-C_2012388EN.01018701-E0006). The Director is responsible for putting in place[(7)](#ntr7-C_2012388EN.01018701-E0007) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts[(8)](#ntr8-C_2012388EN.01018701-E0008) that are free from material misstatement, whether due to fraud or error, and for ensuring that the transactions underlying those accounts are legal and regular. |

The Auditor’s responsibility

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| 5. | The Court’s responsibility is to provide, on the basis of its audit, the European Parliament and the Council[(9)](#ntr9-C_2012388EN.01018701-E0009) with a statement of assurance as to the reliability of the annual accounts of the Office and the legality and regularity of the transactions underlying them. |

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| 6. | The Court conducted 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 that the Court plans and performs the audit to obtain reasonable assurance as to whether the annual accounts of the Office are free of material misstatement and the transactions underlying them are legal and regular. |

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| 7. | An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the accounts and the legality and regularity of the transactions underlying them. The procedures are selected based on the auditor’s judgment, including an assessment of the risks of material misstatement of the accounts and of material non-compliance of the underlying transactions with the requirement of the legal framework of the European Union, whether due to fraud or error. In assessing those risks, the auditor considers internal controls relevant to the preparation and fair presentation of the accounts and supervisory and control systems implemented to ensure legality and regularity of underlying transactions, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made, as well as evaluating the overall presentation of the accounts. |

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| 8. | The Court considers that the audit evidence obtained is sufficient and appropriate to provide a basis for the opinions set out below. |

Opinion on the reliability of the accounts

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| 9. | In the Court’s opinion, the Office’s Annual Accounts[(10)](#ntr10-C_2012388EN.01018701-E0010) present fairly, in all material respects, its financial position as of 31 December 2011 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[(11)](#ntr11-C_2012388EN.01018701-E0011). |

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

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| 10. | In the Court’s opinion, the transactions underlying the annual accounts of the Office for the financial year ended 31 December 2011 are legal and regular in all material respects. |

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| 11. | The comments which follow do not call the Court’s opinions into question. |

COMMENTS ON BUDGETARY AND FINANCIAL MANAGEMENT

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| 12. | In 2010, more than 1,6 million euro had to be cancelled and in 2011, 1,9 million euro (9 % of the appropriations carried over from 2010) were cancelled. As in 2010, carry-overs of commitment appropriations were also high in 2011, with 4,2 million euro (41 %) for Title II (administrative expenditure) and 10,6 million euro (46 %) for Title III (operational expenditure). The high carry-over and cancellation rates and also the high number of 11 budget transfers made in 2011 indicate difficulties in the planning and/or implementation of the Office’s activities. |

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| 13. | The level of payments against commitments was low, with 34 % for Title II and 45 % for Title III and is at odds with the budgetary principle of annuality. |

COMMENTS ON KEY CONTROLS OF THE OFFICE’S SUPERVISORY AND CONTROL SYSTEMS

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| 14. | Procedures concerning the establishment, approval and recording of exceptions and deviations from policies and procedures have not been adopted. Exceptions and deviations were recorded for 7 % of 2011 payments. |

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| 15. | The accounting system has not been fully validated by the Accounting Officer. Key processes such as year end closing and the establishment of staff’s financial rights are not yet covered. |

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| 16. | Weaknesses were found as regards the physical verification and recording of assets before and after the move to the new headquarters. In addition, insurance contracts do not reflect the value of the Office’s assets. Whereas, before the move, net assets were over-insured by about 17 million euro, they are now under-insured by about 21 million euro. |

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| 17. | There is considerable room for improving the preparation, execution and documentation of procurement procedures. |

OTHER COMMENTS

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| 18. | The Office’s Financial Regulation refers to detailed rules and procedures laid down in its Implementing Rules. However, they have not yet been adopted. |

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| 19. | The general conditions of the contract between the Office and the host country on the use of the new headquarters do not include any provision for dilapidation costs[(12)](#ntr12-C_2012388EN.01018701-E0012). However, Annex IV of the lease stipulates that the Office will have to remove a significant number of items when the contract comes to an end. There is no estimate of the related cost and no provision for this has been recorded in the accounts. |

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| 20. | There is considerable room for improving the transparency of recruitment procedures: questions for written tests and interviews were set after the applications had been examined by the selection board; no threshold scores were set for admission to written tests and interviews and for being included in the list of suitable candidates; selection boards did not document all their meetings and decisions. |

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| 21. | According to the EU Staff Regulations, a maximum of 12 days of untaken annual leave can be carried forward to the next year. More days can only be carried forward in exceptional circumstances. However, the Office accepted carry-overs in excess of the 12 days for about 25 % of its staff of approximately 500. |

This Report was adopted by Chamber IV, headed by Dr Louis GALEA, Member of the Court of Auditors, in Luxembourg at its meeting of 18 September 2012.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

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