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Document 52005TA1228(09)

Report on the annual accounts of the European Centre for the Development of Vocational Training for the financial year 2004 together with the Centre's replies

OB C 332, 28.12.2005, p. 60–67 (ES, CS, DA, DE, ET, EL, EN, FR, IT, LV, LT, HU, MT, NL, PL, PT, SK, SL, FI, SV)

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Official Journal

28.12.2005

Official Journal of the European Union

C 332/60

REPORT

on the annual accounts of the European Centre for the Development of Vocational Training for the financial year 2004 together with the Centre's replies

(2005/C 332/09)

CONTENTS

1-2	INTRODUCTION

3-6	THE COURT'S OPINION

7-11	OBSERVATIONS

Tables 1 to 4

The Centre's replies

INTRODUCTION

The European Centre for the Development of Vocational Training (hereinafter ‘the Centre’) was established by Council Regulation (EEC) No 337/75 (1). Its core mandate is to serve the development of vocational training at Community level. In order to achieve this objective, it has the task of compiling and disseminating documentation on vocational training systems. The Centre's competences and activities are summarised, on the basis of information submitted by the Centre, in Table 1.

2.	For information, the annual accounts drawn up by the Centre for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

The Court's opinion is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (2); it was drawn up following an examination of the Centre's accounts, as required by Article 248 of the Treaty establishing the European Community.

The Centre's accounts for the financial year ended 31 December 2004 (3) were drawn up by its Executive Director, pursuant to Article 12a of Regulation (EEC) No 337/75, and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions.

The Court conducted an 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.

6.	The Court has obtained a reasonable basis for the opinion expressed below.

Reliability of the accountsThe Centre's accounts for the financial year ended 31 December 2004 are, in all material respects, reliable.Legality and regularity of the underlying transactionsExcept for the situations described in paragraph 10, the transactions underlying the Centre's annual accounts, taken as a whole, are legal and regular.

OBSERVATIONS

The Centre's financial regulation provides that a distinction must be made in the budget between commitment appropriations and payment appropriations, but this was not done in the budget published for the financial year 2004. Nonetheless, during the financial year in question the Centre managed its operating appropriations in accordance with the rules governing differentiated appropriations. This approach enabled it to reduce the volume of carry-overs of appropriations to the following financial year and thus to give a more accurate picture of its assets. For forthcoming financial years the Centre still needs to adapt its budget to the type of appropriations it is managing.

The Centre provides its staff with a canteen on its premises. Separate accounts are kept for the canteen's purchases and sales (4). These accounts are not subjected to the controls provided for in the financial regulation, and are also not included in the Centre's annual accounts. The Centre should rectify this situation.

9.	The revenue and expenditure account for the financial year 2003 showed a loss of 993 310 euro. Pursuant to the provisions of the Centre's financial regulation, this result should have been entered in an amending budget for the financial year 2004 (5).

10.

In the case of one multiple framework contract, the Centre selected as its first choice a service provider whose financial bid (amount: 150 000 euro) did not meet the conditions laid down in the specifications (6). Compared with the bid of the service provider chosen in second place (amount: 94 500 euro), this choice cost the Centre 55 500 euro more, or over 50 %. More generally, a considerable number of contracts concluded by the Centre with consultants within the framework of its activity programmes were awarded on the basis of negotiated procedures. The competition rules were not always strictly applied in many of the procedures examined by the Court.

11.

The recruitment files examined revealed inconsistencies in the procedures applied and the documents requested in each case. Such inconsistencies could be avoided by adopting a guide on recruitment procedures designed to ensure that they are transparent. The Court's examination of the files of individual members of staff also showed that the staff's financial entitlements are not monitored on a systematic basis. Monitoring would ensure that payments (family allowances, etc.) were no longer made to staff in cases where the grounds for entitlement no longer existed.

This report was adopted by the Court of Auditors in Luxembourg at its meetings of 5 October and 7 December 2005.

For the Court of Auditors

Hubert WEBER

President

(1) OJ L 39, 13.2.1975, p. 1.

(2) OJ L 248, 16.9.2002, p. 1.

(3) These accounts were drawn up on 12 September 2005 and received by the Court on 13 September 2005.

(4) The canteen's revenue and expenditure for the financial year 2004 amounted to 137 000 euro and 133 500 euro respectively.

(5) Article 35 of the Centre's financial regulation.

(6) Contract 2004-FWC14/RP/D/CMC/VCPOD/013/04).

Table 1

European Centre for the Development of Vocational Training (Thessaloniki)

Areas of Community competence deriving from the Treaty

Competence of the Centre as specified in Articles 2 and 3 of Council Regulation (EEC) No 337/75 of 10 February 1975

Governance

Resources made available to the Centre

(2003 data)

Products and services supplied in 2004

(2003 data)

The Community implements a vocational training policy to support and supplement the action of the Member States as regards the content and organisation of vocational training.

Action aims to:

—	facilitate adaptation to industrial changes, in particular through vocational training and retraining;

—	improve initial and continuing vocational training in order to facilitate vocational integration and reintegration into the labour market;

—	facilitate access to vocational training and encourage mobility of instructors and trainees and particularly young people;

—	stimulate cooperation on training between educational or training establishments and firms;

—	develop exchanges of information and experience on issues common to the training systems of the Member States.

(From Article 150 of the Treaty)

The Centre's mandate

In its capacity as a European Union reference centre for vocational training and education, Cedefop provides political decision-makers, researchers and professionals with information aimed at developing a clearer understanding of current trends that will thus enable them to reach more soundly based decisions with a view to future action.

Cedefop assists the European Commission in promoting and developing vocational training and education at Community level.

Tasks

—	To compile selected documentation and produce a data analysis;

—	to contribute to research development and coordination;

—	to utilise and disseminate relevant information;

—	to encourage and support a concerted approach to matters relating to the development of vocational training;

—	to provide a forum for a broad and diverse public.

Management Board

Per Member State:

—	one Government representative;

—	one representative of employers' organisations;

—	one representative of employees' organisations.

Three members representing the Commission, and observers from the associated countries (Norway and Iceland).

2.	Director Appointed by the Commission from a list of candidates submitted by the Management Board; carries out the decisions of the Management Board and is responsible for the day-to-day administration of the Centre.

3.	Internal control Commission's Internal Audit Service.

4.	External audit European Court of Auditors.

5.	Discharge Parliament, on the Council's recommendation.

Budget:

16,6 million euro (14,7 million euro).

Community contribution: 97 % (99 %)

Staff numbers at 31 December 2004:

Number of posts in establishment plan: 88 (83)

Posts occupied: 81 (79)

+ 56 (46) other staff (auxiliary contracts, seconded national experts, local employees and employment agency staff)

Total staff: 137 (125),

assigned to the following duties:

operational: 74 (66)

administrative: 40 (38)

mixed: 23 (21)

Conferences and seminars: 90 (72)

Studies: 55 (65)

Projects: 38 (23)

Participation in:

Copenhagen Process, e-learning Programme, Leonardo da Vinci Programme, social partners' joint action framework.

Publications:

62 (28) publications

3 issues of Cedefop info,

3 issues of the European vocational training review.

Circulation of documents:

10 293(10 244) on request, 2 034(2 346) electronic newsletter subscriptions, 8 460(8 523) subscriptions to Cedefop info.

Maintenance and development of the 'European Training Village' site, on which over 53 000 people are registered, with virtual communities of 8 000 participants.

Participants in the study visits programme: 730 (773)

Source: Information supplied by the Centre.

Table 2

European Centre for the Development of Vocational Training — Implementation of the budget for the financial year 2004

(1000 euro)
Revenue			Expenditure
Source of revenue	Revenue entered in the final budget for the financial year	Revenue received	Allocation of expenditure	Appropriations for the financial year					Appropriations carried over from the previous financial year
Source of revenue	Revenue entered in the final budget for the financial year	Revenue received	Allocation of expenditure	entered	committed	paid	carried over	cancelled	available	committed	paid	carried over	cancelled
Commission subsidy	15 800 (1)	13 700	Title I
Miscellaneous revenue	72	42	Staff (NDA)	9 243	9 045	8 579	466	197	443	0	393	0	50
Phare assigned revenue	315	277	Title II
Third-country assigned revenue	359	359	Administration (NDA)	1 395	1 310	768	542	85	358	0	352	0	6
Other assigned revenue	0	88	Title III
			Operating activities (DA)
			— CA	5 234	5 234	—	—	—	—	—	—	—	—
			— PA	3 062	—	2 508	—	554	3 138	—	2 702	—	436
			Assigned revenue	724	724	415	309	0	382	382	319	63	—
	16 546	14 466	Total CA	16 596	16 313	—	—	282	1 183	382	—	—	56
	16 546	14 466	Total PA	14 424	—	12 270	1 317	836	4 321	—	3 766	63	492
NDA: non-differentiated appropriations (commitment appropriations are equal in amount to payment appropriations). DA: differentiated appropriations (commitment appropriations may differ in amount from payment appropriations). CA: commitment appropriations in the context of differentiated appropriations. PA: payment appropriations in the context of differentiated appropriations. Source: Information supplied by the Centre — This table summarises the data provided by the Centre in its annual accounts.

Table 3

European Centre for the Development of Vocational Training — Revenue and expenditure account for the financial years 2004 and 2003

(1000 euro)
	2004	2003
Revenue
Commission subsidies	13 700	14 500
Assigned revenue	724	792
Miscellaneous revenue	42	3
Total revenue (a)	14 466	15 295
Budgetary expenditure for the financial year
Staff — Title I of the budget
Payments	8 579	7 554
Appropriations carried over	466	443
Administration — Title II of the budget
Payments	768	778
Appropriations carried over	542	358
Operating activities — Title III of the budget (except for assigned revenue)
Payments against payment appropriations for the financial year	2 508	2 381
Payments against outstanding commitments at 31.12.2003	2 702
Appropriations carried over		3 138
Assigned revenue (PHARE and third countries)
Payments	415	546
Appropriations carried over	309	246
Total expenditure (b)	16 289	15 444
Outturn for the financial year (a – b)	–1 823	– 149
Balance carried over from the previous financial year	– 993	– 545
N-1 appropriations carried over and cancelled (Title I and II non-differentiated appropriations)	56	399
Neutralisation of N-1 carry-over for Title III connected with changeover to differentiated appropriations	3 138	—
Sums for re-use from the previous financial year not used	1	10
Refunds to the Commission	0	– 716
Exchange-rate differences	–4	8
Balance for the financial year	375	– 993
Source: Information supplied by the Centre — This table summarises the data provided by the Centre in its annual accounts.

Table 4

European Centre for the Development of Vocational Training — Balance sheet at 31 December 2004 and 31 December 2003

(1000 euro)
Assets	2004	2003	Liabilities	2004	2003
Fixed assets			Fixed capital
Intangible fixed assets	183	14	Own capital	5 702	5 704
Buildings	5 059	5 179	Balance for the financial year	375	– 993
Equipment and furniture	455	471	Subtotal	6 077	4 711
Financial fixed assets, guarantee	5	5	Current liabilities
Subtotal	5 702	5 669	Assigned revenue not received	—	315
Stocks			Appropriations carried over against Titles I, II and III	1 008	3 939
Office supplies	—	35	Appropriations carried over against assigned revenue	372	382
Subtotal	—	35	Sundry accounts payable	89	86
Long-term assets			VAT/other taxes	91	90
Staff loans	—	3	Bank interest to be returned to the EU	148	64
Subtotal	—	3	Subtotal	1 708	4 876
Current assets			Suspense accounts
Commission	—	315	Sums to be reused	—	157
Other advances	26	37	Subtotal	—	157
Recoverable VAT	34	34
Sundry accounts receivable	74	81
Subtotal	134	467
Cash accounts
Banks	1 905	3 532
Cash	3	5
Imprest account	41	33
Subtotal	1 949	3 570
Total	7 785	9 744	Total	7 785	9 744
Source: Information supplied by the Centre — This table summarises the data provided by the Centre in its annual accounts.

(1) This is the amount published in the Official Journal and represents the total amount of commitment appropriations allocated to Cedefop in the Commission's budget. In the annual accounts published by the Centre, it preferred to report the amount of the corresponding payment appropriations (13 700 000 euro).

NDA: non-differentiated appropriations (commitment appropriations are equal in amount to payment appropriations).

DA: differentiated appropriations (commitment appropriations may differ in amount from payment appropriations).

CA: commitment appropriations in the context of differentiated appropriations.

PA: payment appropriations in the context of differentiated appropriations.

Source: Information supplied by the Centre — This table summarises the data provided by the Centre in its annual accounts.

THE CENTRE'S REPLIES

7.	Cedefop will take the measures necessary to ensure that its budget is presented correctly in future.

The accounts of the canteen are kept separately for all current expenditure and revenue. They are recorded in a cash-book and are subject to controls, notably by the Greek tax authorities as regards VAT. However, the Centre takes good note of the Court's remark and will explore what possibilities exist to rectify the situation, for example through the use of the imprest accounts.

9.	Cedefop will take the necessary measures to avoid a recurrence of such situations in future.

10.

During its work, the Evaluation Committee based itself principally on the cost per day and not on the total cost of the required work, which led to the situation described by the Court. Cedefop will draft instructions for members of evaluation committees to ensure that they take good account of all the elements mentioned in calls for tenders, which will allow their work to be more transparent. In the case of the negotiated procedures, the Centre takes note of the comments made by the Court. The Centre has already put in place an action plan which aims to remedy the shortcomings identified. The new director took up her duties on 16 October 2005. Since then no more negotiated procedures with less than three candidates have been started and great care has been taken to ensure regularity in the tendering procedures.

11.	The preparation of a guide on recruitment procedures is one of the objectives for 2005. A periodical review of the entitlements to allowances of Cedefop's staff was introduced in 2005.

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