Source: EURLEX
Language: en
Format: md

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| 15.12.2012 | EN | Official Journal of the European Union | C 388/214 |

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REPORT

on the annual accounts of the Office for Harmonization in the internal Market for the financial year 2011, together with the Office’s replies

2012/C 388/36

INTRODUCTION

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| 1. | The Office for Harmonization in the Internal Market (hereinafter "the Office"), which is located in Alicante, was established by Council Regulation (EC) No 40/94[(1)](#ntr1-C_2012388EN.01021401-E0001). The Office’s task is to implement the Union legislation on trade marks and designs, which gives undertakings uniform protection throughout the entire area of the European Union[(2)](#ntr2-C_2012388EN.01021401-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.01021401-E0003) of the Office, which comprise the “financial statements”[(4)](#ntr4-C_2012388EN.01021401-E0004) and the “reports on the implementation of the budget”[(5)](#ntr5-C_2012388EN.01021401-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 President 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.01021401-E0006). The President is responsible for putting in place[(7)](#ntr7-C_2012388EN.01021401-E0007) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts[(8)](#ntr8-C_2012388EN.01021401-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.01021401-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.01021401-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.01021401-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. | The Court identified several shortcomings as regards the 2011 service level agreement between the Office and the Translation Center for the Bodies of the EU (CDT). The agreement was signed by the Office on. 20 June 2011 and according to article 10, applied from 1st January 2011. The execution of the contract started before the contract signature. On request of CDT, the Office made a payment of 1,8 million euro in compensation[(12)](#ntr12-C_2012388EN.01021401-E0012). Furthermore, this payment was authorised without a budget commitment and without available appropriations[(13)](#ntr13-C_2012388EN.01021401-E0013). |

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| 13. | The Court identified five cases amounting to 2,9 million euro where budgetary commitments were approved after legal commitments. |

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

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| 14. | There is a need to improve the Office’s management of fixed assets. For intangible assets developed by the Office, accounting procedures and information on costs were not reliable. |

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| 15. | Cash held by the Office as at 31 December 2011 totalled 520 million euro (495 million euro in 2010). Following the treasury policy approved by the Budget committee in 2010 the cash was held in 9 banks in 5 Member States. |

OTHER COMMENTS

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| 16. | The Office needs to improve the transparency of recruitment procedures. The threshold scores for admission to interviews and written tests were not set in advance and questions for oral and written tests were not set before the applications were examined by the selection boards. Moreover, there was no decision by the Appointing Authority to appoint the selection board and in one case the segregation of duties between the Appointing Authority and the selection board was not ensured. |

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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