Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol Adjusting the Agreement on the European Economic Area, hereinafter referred to as the EEA Agreement,

Having regard to the Agreement on the participation of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic in the European Economic Area, hereinafter referred to as the EEA Enlargement Agreement (1),

Having regard to Protocol 38a on the EEA Financial Mechanism inserted into the EEA Agreement by the EEA Enlargement Agreement,

Having regard to the Agreement between the Kingdom of Norway and the European Community on a Norwegian Financial Mechanism for the period 2004-2009 (2),

Having regard to Decision of the Standing Committee of the EFTA States No 1/2004/SC of 5 February 2004 Establishing an Office for the EEA Financial Mechanism and the Norwegian Financial Mechanism,

Having regard to Decision of the Standing Committee of the EFTA States No 4/2004/SC of 3 June 2004 establishing a Financial Mechanism Committee,

Having regard to the Decision of the ESA/Court Committee No 15/2005 of 22 December 2005 concerning the mandate of the EFTA Board of Auditors (‘at three’),

Article 1

The Board of Auditors shall act as supreme authority for the auditing of projects under the EEA Financial Mechanism 2004-2009 (hereinafter referred to as ‘EEA Financial Mechanism’). This includes the audit of projects in the Beneficiary States, the Beneficiary States’ management of the Projects and implementation of the EEA Financial Mechanism. The Board of Auditors shall also audit the management of the EEA Financial Mechanism by the Financial Mechanism Office.

Article 2

The Board of Auditors shall consist of nationals from the EFTA States party to the EEA Agreement and preferably being members of the supreme audit institutions of the EFTA States. Their independence must be beyond doubt. An official of EFTA may not be appointed auditor until an interval of three years has elapsed since the end of his appointment with any of the EFTA institutions.

Article 3

The members of the Board of Auditors that perform audits according to Article 1 shall be the same persons as those appointed in and for the same term as set out in the Decision of the ESA/Court Committee, No 15/2005 of 22 December 2005.

Article 4

The members of the Board of Auditors shall be completely independent in the performance of their duties.

Article 5

The members of the Board of Auditors shall closely cooperate with the person or persons entrusted with the corresponding audits under the Norwegian Financial Mechanism for the period 2004-2009 in audits of activities relating to both Financial Mechanisms.

Article 6

The cost of appropriate and proportional audits as referred to in Article 1 shall be financed from the administrative budget of the EEA Financial Mechanism. Based on an according budget proposal from the Board of Auditors and a recommendation from the Financial Mechanism Committee, the Standing Committee shall agree on the amount to be granted for this purpose.

Article 7

The Board of Auditors may engage external experts to assist it. The external experts must fulfil the same requirements of independence and comply with the same duty of cooperation provided for in Article 6 as the members of the Board of Auditors.

Article 8

The Board of Auditors shall report to the Standing Committee of the EFTA States regarding the audit referred to in Article 1. It may submit proposals for action.

Article 9

The Board of Auditors shall propose its own terms of references concerning the audit referred to in Article 1 and submit them to the Standing Committee of the EFTA States for adoption.

Article 10

This Decision shall take immediate effect.

Article 11

This Decision shall be published in the EEA Section of, and in the EEA Supplement to, the Official Journal of the European Union.