15.12.2011   

EN

Official Journal of the European Union

C 366/112

1.

The European GNSS (Global Navigation Satellite System) Agency (hereinafter ‘the Agency’), which is located in Brussels, was set up by Council Regulation (EC) No 1321/2004 of 12 July 2004 (1) to manage the public interests relating to the European GNSS programmes and to act as the regulatory agency for the programme during the deployment and operational phases of the Galileo Programme. Regulation (EC) No 683/2008 of the European Parliament and of the Council of 9 July 2008 (2) reduced the responsibilities of the Agency to the control of the security of Galileo systems and to the preparation of their commercialisation. The Agency was previously known, until 2010, as the European GNSS Supervisory Authority (3).

2.

The Agency’s 2010 adopted budget amounted to 15,9 million euro, compared with 44,4 million euro the previous year. The number of staff employed by the Agency at the end of the year was 42, compared with 35 the previous year.

3.

Pursuant to the provisions of Article 287(1), second subparagraph, of the Treaty on the Functioning of the European Union, the Court has audited the annual accounts (4) of the Agency, which comprise the ‘financial statements’ (5) and the ‘reports on the implementation of the budget’ (6) for the financial year ended 31 December 2010, and the legality and regularity of the transactions underlying those accounts.

4.

This Statement of Assurance is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (7).

5.

As authorising officer, the Director implements the revenue and expenditure of the budget in accordance with the financial rules of the Agency, under his own responsibility and within the limits of the authorised appropriations (8). The Director is responsible for putting in place (9) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts (10) 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.

6.

The Court’s responsibility is to provide, on the basis of its audit, a statement of assurance as to the reliability of the annual accounts of the Agency and the legality and regularity of the transactions underlying them.

7.

The Court conducted its audit in accordance with the IFAC and ISSAI (11) International Auditing Standards and Codes of Ethics. Those standards require the Court to comply with ethical requirements and to plan and perform the audit so as to obtain reasonable assurance as to whether the accounts are free of material misstatement and whether the underlying transactions are legal and regular.

8.

The Court’s audit involves performing procedures to obtain audit evidence of the amounts and disclosures in the accounts and of the legality and regularity of the transactions underlying them. The procedures selected, including its assessment of the risks of material misstatement of the accounts or of illegal or irregular transactions, whether due to fraud or error, depend on its audit judgement. In making those risk assessments, internal controls relevant to the entity’s preparation and presentation of accounts are considered in order to design audit procedures that are appropriate in the circumstances. The Court’s audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the accounts.

9.

The Court believes that the audit evidence obtained is sufficient and appropriate to provide a basis for its qualified opinion on the reliability of the accounts and its opinion on the legality and regularity of the transactions underlying the accounts.

10.

During 2010 the Agency purchased tangible fixed assets (12) related to the Galileo programme (13) in the amount of 4,4 million euro. These assets are due to be transferred by the Agency to the European Commission. These assets have been recorded as research expenditure but should have instead been classified as assets held for transfer. The result of this transaction is an understatement of assets in the amount of 4,4 million euro and an understatement of the economic outturn account by the same amount.

11.

In the Court’s opinion, except for the effect of the matter described in paragraph 10, the Agency’s Annual Accounts (14) fairly present, in all material respects, its financial position as of 31 December 2010 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its Financial Regulation.

12.

In the Court’s opinion, the transactions underlying the annual accounts of the Agency for the financial year ended 31 December 2010 are, in all material respects, legal and regular.

13.

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

14.

As regards the Seventh Framework Programme/Galileo/Second Call grant procedures with a budget of 26 million euro, the evaluation process did not clearly distinguish between selection and award criteria. Criteria for assessing the applicants’ financial capacity were not defined. Although the status of the applicant determined the maximum reimbursement rate, such status was not verified by the Agency.

15.

As regards the Sixth Framework Programme (FP6)/ Third Call, in two grant agreements audited, the cost claims submitted by the beneficiaries were based on standard rates, instead of actual costs. This was not in compliance with the non-profit principle for EU financial contributions.

16.

Five audited grants, related mainly to the Sixth Framework Programme, showed delays of between one and three years for their implementation. Successive increases in the initial value of the contracts were noted.

17.

Following the entry into force of Regulation (EC) No 683/2008, most of the activities and assets related to the EGNOS and Galileo programmes were transferred to the Commission in December 2009. At 31 December 2010, the status of 2 million euro held by the Agency in respect of technical support from the European Space Agency had still to be determined.

18.

In the staff selection procedures audited, threshold scores were not determined for admission to written tests and interviews or for inclusion in the list of suitable candidates. These practices jeopardised the transparency of the recruitment procedures.