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Document 52013TA1213(33)
Report on the annual accounts of the European Police Office for the financial year 2012, together with the Office’s replies
Report on the annual accounts of the European Police Office for the financial year 2012, together with the Office’s replies
Report on the annual accounts of the European Police Office for the financial year 2012, together with the Office’s replies
OJ C 365, 13.12.2013, p. 236–244
(BG, ES, CS, DA, DE, ET, EL, EN, FR, HR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV)
13.12.2013 |
EN |
Official Journal of the European Union |
C 365/236 |
REPORT
on the annual accounts of the European Police Office for the financial year 2012, together with the Office’s replies
2013/C 365/33
INTRODUCTION
1. |
The European Police Office (hereinafter ‘the Office’, aka ‘Europol’), which is located in The Hague, was established by Council Decision (2009/371/JHA) (1). The objective of the Office is to support and strengthen action by the Member States' police authorities and other law enforcement services and their mutual cooperation in preventing and combating serious crime affecting two or more Member States, terrorism and forms of crime which affect a common interest covered by a Union policy (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 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
3. |
Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:
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The management’s responsibility
4. |
In accordance with Articles 33 and 43 of Commission Regulation (EC, Euratom) No 2343/2002 (5), the management is responsible for the preparation and fair presentation of the annual accounts of the Office and the legality and regularity of the underlying transactions:
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The auditor’s responsibility
5. |
The Court’s responsibility is, on the basis of its audit, to provide the European Parliament and the Council (7) with a statement of assurance as to the reliability of the annual accounts and the legality and regularity of the underlying transactions. The Court conducts 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 the Court to plan and perform the audit to obtain reasonable assurance as to whether the annual accounts of the Office are free from material misstatement and the transactions underlying them are legal and regular. |
6. |
The audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the accounts and the legality and regularity of the underlying transactions. The procedures selected depend on the auditor’s judgement, which is based on an assessment of the risks of material misstatement of the accounts and material non-compliance by the underlying transactions with the requirements in the legal framework of the European Union, whether due to fraud or error. In assessing these risks, the auditor considers any internal controls relevant to the preparation and fair presentation of the accounts, as well as the supervisory and control systems that are implemented to ensure the legality and regularity of underlying transactions, and designs audit procedures that are appropriate in the circumstances. The audit also entails evaluating the appropriateness of accounting policies, the reasonableness of accounting estimates and the overall presentation of the accounts. |
7. |
The Court considers that the audit evidence obtained is sufficient and appropriate to provide a basis for its statement of assurance. |
Opinion on the reliability of the accounts
8. |
In the Court’s opinion, the Office’s annual accounts present fairly, in all material respects, its financial position as at 31 December 2012 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. |
Opinion on the legality and regularity of the transactions underlying the accounts
9. |
In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2012 are legal and regular in all material respects. |
10. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON THE LEGALITY AND REGULARITY OF TRANSACTIONS
11. |
The Office carried over 1,2 million euro for changes to the Office’s building in connection with setting up the European cyber-crime centre. Whilst it agreed these changes with the host state in July 2012, the contract for the works required was only signed in April 2013. In addition, Europol carried over 0,1 million euro related to the introduction of a new HR system. The contract expired at the end of the year and was not extended. Both carry-overs did not correspond to legal commitments made at year-end and were thus irregular. |
COMMENTS ON INTERNAL CONTROLS
12. |
The Office does not regularly require from staff up-to-date information on the amount of child allowance received from other sources. In consequence, a number of cases were found where the child allowance was not reduced accordingly and any amounts paid unduly should be recovered. |
COMMENTS ON BUDGETARY MANAGEMENT
13. |
Commitments amounting to 2,6 million euro (out of 15 million euro) carried over from 2011 had to be cancelled in 2012, as these were in excess of the actual needs. |
14. |
The Office carried over 16,3 million euro of committed appropriations (19,64 % of total committed appropriations) to 2013. These carry-overs mainly concern title II – other administrative expenditure – (4,2 million euro) and title III – operational activities – (11,2 million euro) and are mostly related to the new task assigned to Europol in June 2012 of running the European cyber-crime centre. The implementation of this task resulted in significant budgetary commitments made close to year end and affected the amount carried over to 2013. |
15. |
The Office made 19 budgetary transfers amounting to 4,5 million euro affecting 82 of the 115 budget lines. They were mainly performed to purchase IT equipment for the European cyber-crime centre. |
OTHER COMMENTS
16. |
The recruitment procedures examined showed the following shortcomings: questions for written tests and interviews were set after the applications had been examined by the selection board; there was no evidence that the weighting of the selection criteria used for short listing was set before the examination of the applications; selection boards did not appropriately document all their meetings and decisions. |
FOLLOW-UP OF PREVIOUS YEAR’S COMMENTS
17. |
An overview of the corrective actions taken in response to the Court’s previous year’s comments is provided in Annex I. |
This Report was adopted by Chamber IV, headed by Dr Louis GALEA, Member of the Court of Auditors, in Luxembourg at its meeting of 17 September 2013.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 121, 15.5.2009, p. 37.
(2) Annex II summarises the Office’s competences and activities. It is presented for information purposes.
(3) These include the balance sheet and the economic outturn account, 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 budgetary outturn account and the annex to the budgetary outturn account.
(5) OJ L 357, 31.12.2002, p. 72.
(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 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (OJ L 248, 16.9.2002, p. 1).
ANNEX I
Follow-up of previous year’s comments
Year |
Court’s comment |
Status of corrective action (Completed / Ongoing / Outstanding / N/A) |
2011 |
The high carry-over and cancellation rates and also the high number of budget transfers made in 2011 indicate difficulties in the planning and/or implementation of the Office’s activities. |
Ongoing |
2011 |
The level of payments against commitments was low, with 34 % for title II and 45 % for title III and is at odds with the budgetary principle of annuality. |
Ongoing |
2011 |
Procedures concerning the establishment, approval and recording of exceptions and deviations from policies and procedures have not been adopted. Exceptions and deviations were recorded for 7 % of 2011 payments. |
Ongoing |
2011 |
The accounting system has not been fully validated by the Accounting Officer. Key processes such as year-end closing and the establishment of staff’s financial rights are not yet covered. |
Ongoing |
2011 |
Weaknesses were found as regards the physical verification and recording of assets before and after the move to the new headquarters. In addition, insurance contracts do not reflect the value of the Office’s assets. Whereas, before the move, net assets were over-insured by about 17 million euro, they are now under-insured by about 21 million euro. |
Physical inventory: Ongoing Insurance coverage: Completed |
2011 |
There is considerable room for improving the preparation, execution and documentation of procurement procedures. |
Completed |
2011 |
The Office’s Financial Regulation refers to detailed rules and procedures laid down in its Implementing Rules. However, they have not yet been adopted. |
Ongoing |
2011 |
The general conditions of the contract between the Office and the host country on the use of the new headquarters do not include any provision for dilapidation costs (1). However, Annex IV of the lease stipulates that the Office will have to remove a significant number of items when the contract comes to an end. There is no estimate of the related cost and no provision for this has been recorded in the accounts. |
Completed |
2011 |
There is considerable room for improving the transparency of recruitment procedures: questions for written tests and interviews were set after the applications had been examined by the selection board; no threshold scores were set for admission to written tests and interviews and for being included in the list of suitable candidates; selection boards did not document all their meetings and decisions. |
Ongoing |
2011 |
According to the EU Staff Regulations, a maximum of 12 days of untaken annual leave can be carried forward to the next year. More days can only be carried forward in exceptional circumstances. However, the Office accepted carry-overs in excess of the 12 days for about 25 % of its staff of approximately 500. |
Completed |
(1) The cost of returning the building to its initial condition when the lease comes to an end.
ANNEX II
European Police Office (The Hague)
Competences and activities
Areas of Union competence deriving from the Treaty (Article 88 of the Treaty on the Functioning of the European Union) |
‘Europol’s mission shall be to support and strengthen action by the Member States’ police authorities and other law enforcement services and their mutual cooperation in preventing and combating serious crime affecting two or more Member States, terrorism and forms of crime which affect a common interest covered by a Union policy’. |
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Competences of the Office (Council Decision 2009/371/JHA establishing the European Police Office (Europol) (ECD)) |
Competence Europol’s competence shall cover organised crime, terrorism and other forms of serious crime affecting two or more Member States in such a way as to require a common approach by the Member States owing to the scale, significance and consequences of the offences. Europol’s competence shall also cover related criminal offences as defined in article 4(3) ECD. Principal tasks
Additional tasks
Additionally, to assist Member States through support, advice and research in the following areas
And Europol shall also act as the Central Office for combating euro counterfeiting in accordance with Council Decision 2005/511/JHA of 12 July 2005 on protecting the euro against counterfeiting, by designating Europol as the Central Office for combating euro counterfeiting. Europol shall process and transfer financial messaging data in accordance with the Agreement between the European Union and the United States of America on the processing and transfer of Financial Messaging Data from the European Union to the United States for purposes of the ‘Terrorist Finance Tracking Program’ (TFTP). And Europol shall continue efforts to establish the Prüm Helpdesk in order to support the daily application of the ‘Prüm Decisions’ in accordance with the Council conclusions of 13 December 2011 on intensifying the implementation of the ‘Prüm Decisions’. And Europol shall host the European Cybercrime Centre and act as the focal point in Europe’s fight against cybercrime in accordance with the Communication from the Commission to the Council and European Parliament COM(2012) 140 final of 28 March 2012‘Tackling crime in our Digital Age: Establishing a European Cybercrime Centre’. |
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Governance |
Management Board The Management Board shall be composed of one representative of each Member State and one representative of the Commission. Director
External audit European Court of Auditors. Internal audit
Data protection and safeguarding of personal rights
Discharge authority European Parliament, taking into account a recommendation from the Council acting by qualified majority. |
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Resources made available to the Office in 2012 (2011) |
Final budget 2012 84,2 (84,8) million euro Staff in 2012
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Products and services in 2012 (2011) |
Europol as the principal EU support centre for law enforcement operations Operational support to operations and Joint Investigation Teams (JITs) include: data processing, cross match reports, hit notification, technical/forensic support and expertise, mobile office deployments, analysis reports, operational coordination at Europol HQ, operational meetings, financial assistance etc. There was a substantial increase in the amount of operational support provided to Member States confirming the trend evident in previous years towards increased requests for all Europol services:
Strategic analysis capability Strategic products: Threat Assessments, Situation Reports and Intelligence Notifications:
Europol as the EU criminal information hub Information management capabilities, Secure Information Exchange Network Application (SIENA), Europol Information System (EIS), Liaison Bureaux network.
Europol as the EU centre for law enforcement expertise Europol Platforms for Experts (EPE), Data exchange platforms and storage solutions, Knowledge products and services, Training, Conferences and awareness sessions:
External relations Europol cooperates with a number of EU partners, third countries and international organisations. The exchange of information with these partners takes place on the basis of cooperation agreements. Strategic agreements make it possible for the two parties involved to exchange all information with the exception of personal data, while operational agreements also allow the exchange of personal data.
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Source: Information supplied by the Office. |
THE OFFICE'S REPLIES
11. |
When considering the two budget commitments in question, Europol acted in good faith, in the understanding that in both cases a legal commitment had been established. Additional measures will be taken to prepare and assess the fulfilment of technical requirements for ‘automatic’ carry-forwards, in time before the end of the concerned budget year. If necessary, ‘non-automatic’ carry forwards will be proposed to the Europol Management Board for approval. |
12. |
Following Europol’s validation of the human resources related information and processes for the financial year 2012, corrective actions were taken. As of the beginning of 2013, Europol reminds all staff members on a monthly basis, when issuing the salary statements, about their obligation to notify Europol about any changes to the personal situation. The cases referred to by the ECA did not have a material impact. |
13. |
The cancellations are to a large extent related to commitments for the new headquarters (1,1 Million Euro). By the end of 2011, Europol did not have much experience regarding user related costs in the new headquarters. Further to this, commitments related to ICT were higher than anticipated, various legal damages did not have to be paid and the budget for some activity related administrative and operational expenditure lapsed. |
14. |
Europol was entrusted with the responsibility for the European Cyber Crime Centre (EC3) during the budget year of 2012 (by decision of the Justice and Home Affairs Council in June 2012). No appropriations were included for this new task in the original budget planning for the financial year 2012 and by the end of 2012, it became clear that it would not be accompanied by additional resources in the budget 2013. Consequently, commitments for this new task had to be taken on the budget 2012 at the end of the year which affected the amount carried forward to 2013. |
15. |
The transfers were necessary to ensure business continuity throughout the budget year and in particular to ensure availability of budget for the EC3. |
16. |
Recruitment related comments:
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