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Document 52015TA1209(27)
Report on the annual accounts of the European Railway Agency for the financial year 2014, together with the Agency’s reply
Report on the annual accounts of the European Railway Agency for the financial year 2014, together with the Agency’s reply
Report on the annual accounts of the European Railway Agency for the financial year 2014, together with the Agency’s reply
OJ C 409, 9.12.2015, p. 238–246
(BG, ES, CS, DA, DE, ET, EL, EN, FR, HR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV)
9.12.2015 |
EN |
Official Journal of the European Union |
C 409/238 |
REPORT
on the annual accounts of the European Railway Agency for the financial year 2014, together with the Agency’s reply
(2015/C 409/27)
INTRODUCTION
1. |
The European Railway Agency (hereinafter ‘the Agency’, aka ‘ERA’), which is located in Lille and Valenciennes, was created by Regulation (EC) No 881/2004 of the European Parliament and of the Council (1). The Agency's task is to enhance the level of interoperability of railway systems and to develop a common approach to safety in order to contribute to creating a more competitive European railway sector with a high level of safety (2). |
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
2. |
The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of key controls of the Agency’s supervisory and control systems. This is supplemented by evidence provided by the work of other auditors and an analysis of management representations. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
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10. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
11. |
The overall level of committed appropriations was high at 97 %. However, there was also a high level of committed appropriations carried over for the operational budget (title III) at 2,2 million euro, i.e. 37,7 % (2013: 1,6 million euro, i.e. 25 %) due to delayed operational projects (safety, European Railways Traffic Management System — ERTMS) and delayed IT projects. This situation is at odds with the budgetary principle of annuality. |
OTHER COMMENTS
12. |
When implementing a multiple framework contract on ERTMS project follow-up, the Agency reopened a competition procedure for the award of a specific contract. However, both the excessive weighting of quality and the high maximum contract value in the reopening tender resulted in financial offers close to the maximum contract value. This is in contradiction with the objective of reopening a competition procedure, which is to ensure competition on price. |
FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS
13. |
An overview of the corrective actions taken in response to the Court's comments from the previous years is provided in Annex I. |
This Report was adopted by Chamber IV, headed by Mr Milan Martin CVIKL, Member of the Court of Auditors, in Luxembourg at its meeting of 8 September 2015.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 220, 21.6.2004, p. 3.
(2) Annex II summarises the Agency's competences and activities. It is presented for information purposes.
(3) These include the balance sheet and the statement of financial performance, the cash flow table, the statement of changes in net assets and a summary of the significant accounting policies and other explanatory notes.
(4) These comprise the budgetary outturn account and the annex to the budgetary outturn account.
(5) Articles 39 and 50 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).
(6) The accounting rules adopted by the Commission’s accounting officer are derived from the International Public Sector Accounting Standards (IPSAS) issued by the International Federation of Accountants or, where relevant, the International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.
(7) Article 107 of Regulation (EU) No 1271/2013.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX I
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
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2011 |
The Agency’s Founding Regulation sets maximum employment periods for temporary staff recruited by the Agency from the professionals of the railways sector. According to these provisions, the Agency will have to replace half of its operational staff in the period 2013-2015, which may cause major disruptions in the Agency’s operational activities (1). |
On-going |
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2011 |
There is room to improve the Agency’s recruitment procedures in order to fully ensure transparency and equal treatment of candidates. As an example, vacancy notices did not provide information on the required minimum number of years of post-secondary or university studies which however was used as a selection criterion. The pass marks for interviews and reserve lists, the scoring of selection criteria, the questions for oral and written tests and the weightings between written and oral tests were not set before applications were examined. |
On-going |
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2012 |
The Agency does not comply with its Internal Control Standard regarding business continuity; there are no approved IT Business Continuity and Disaster Recovery plans. |
Completed |
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2013 |
There is room to improve the accuracy and documentation of information used in the Agency’s procurement procedures. |
Completed |
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2013 |
According to the Agency's founding regulation (1), staff shall consist of:
At the end of 2013, 136 temporary employees were working for the Agency. The founding regulation also stipulates that during the first ten years of the Agency’s operations, the five-year period for them may be extended by up to a maximum of a further three years when required to guarantee business continuity. The Agency used this option as standard practice until mid-2013. Furthermore, in the period from September 2013 to March 2014, the Agency re-employed four temporary employees (for an eight-year period) whose contracts with ERA had ended in 2013 after the maximum eight-year period. In 2013 the Agency adopted a new decision in agreement with its Administrative Board and the Commission, according to which temporary employees can have indefinite contracts. The proposal for a revised founding regulation for ERA includes similar provisions but it is unclear if and when this will be adopted by Parliament and Council. |
On-going |
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2013 |
The Agency is located in Lille and Valenciennes. As the Court mentioned in its Specific Annual Report for the financial year 2006, it is likely that costs could be reduced if all operations were centralised in one location. This might also facilitate a comprehensive seat agreement with the host Member State thereby clarifying the conditions under which the Agency and its staff operate. |
On-going |
(1) Article 24(3) of Regulation (EC) No 881/2004.
ANNEX II
European Railway Agency (Lille and Valenciennes)
Competences and activities
Areas of Union competence deriving from the Treaty (Article 91(1) of the Treaty on the Functioning of the European Union) |
‘For the purpose of implementing Article 90, and taking into account the distinctive features of transport, the European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee and the Committee of the Regions, lay down:
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Competences of the Agency (Regulation (EC) No 881/2004 of the European Parliament and of the Council) |
Objectives To contribute, on technical matters, to the implementation of the Union legislation aimed at:
in order to contribute to creating a European railway area without frontiers and guaranteeing a high level of safety. Tasks
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Governance |
Administrative Board Comprises one representative from each Member State, four representatives from the Commission and six representatives, without the right to vote, from the professional sectors concerned. Director Appointed by the Administrative Board on a proposal from the Commission. External audit European Court of Auditors. Discharge authority European Parliament, following a recommendation from the Council. |
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Resources made available to the Agency in 2014 (2013) |
Budget 25,7(25,8) million euro Staff at 31 December 2014 Posts listed in the establishment plan: 140 (143) Posts occupied on 31.12.2014: 132 (135) Other staff: 19 (15) Total staff: 151 (150), of which assigned to:
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Products and services in 2014 |
Development of a programme plan setting out milestones to deliver a single safety certificate. Monitoring of and biennial report on safety performance. Evaluating transposition of the Safety Directive. NSA audits. NIB assessments. Drafting a recommendation on a revised Common Safety Method for assessing CSTs and NRVs. Annual reporting on CSTs. Running a pilot on a new regulatory monitoring matrix. Reviewing the current framework on assessment and supervision by NSAs. Implementing TSIs with extended geographical scope and guiding, supporting and advising the rail sector and Member States when implementing the telematics TSIs. Revising the PRM TSI. Closing the remaining open points. Developing the Reference Document Database. Facilitating trial ‘one-stop-shop’ authorisations. Facilitating migration to the 4th Railway Package. Follow-up of the development, testing and implementation of ERTMS. Developing a roadmap to enable ETCS communications on packet-switched radio technologies. Developing and publishing guideline documents to simplify and standardise the engineering in relation to ERTMS. Supporting harmonised operations with ERTMS. Cooperation with the INEA Executive Agency in evaluating specific ERTMS projects. Continuously implementing appropriate tools and resources in order to become a modern organisation which can quickly adapt to any changes. |
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Source: Annex supplied by the Agency. |
THE AGENCY’S REPLY
11. |
The Agency has taken note of the Court’s comment and further improved the monitoring of the budgetary implementation of in particular title III that should help in reaching an acceptable level of appropriations to be carried over in the future. |
12. |
The Agency has taken note of the Court’s comment and is preparing internal guidance on the use of the reopening of competition procedure to ensure better competition on price. |