Opinion No 9/2003

of the Court of Auditors of the European Communities on a draft Commission regulation on a standard financial regulation for the executive agencies pursuant to Council Regulation (EC) No 58/2003 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes

(2004/C 19/01)

THE COURT OF AUDITORS OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community, and in particular Article 248(4) thereof,

Having regard to the request by the Secretary-General of the Commission for an opinion on a draft Commission regulation(1) on a standard financial regulation for the executive agencies pursuant to Council Regulation (EC) No 58/2003 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes(2) (hereinafter the "draft Commission regulation"),

Whereas Articles 53 and 55 of the Financial Regulation applicable to the general budget (hereinafter the "general Financial Regulation")(3) provide for implementation of the budget through executive agencies,

Whereas the purpose of the draft Commission regulation is to enforce Article 15 of Council Regulation (EC) No 58/2003, requiring that the Commission should adopt a standard financial regulation applicable to the operating budget of an executive agency,

HAS ADOPTED THE FOLLOWING OPINION:

1. The English wording of the draft Commission regulation presents the problems set out in this paragraph and in the following one. As stated in its Article 1, the draft Commission regulation concerns the establishment and execution of the "administrative budget" of the executive agencies. In Council Regulation (EC) No 58/2003 this budget is called "operating budget". In its opinion on the Commission's proposal for Council Regulation (EC) No 58/2003(4), the Court had drawn attention to a risk of confusion when using the adjective "operating" with reference to administrative expenditure. The term "operating" is nevertheless used in Articles 5 and 21 of the draft Commission regulation with respect to the expenditure dealt with in the administrative budget(5).

2. The term "management board" is used in the draft Commission regulation, whereas an executive agency, pursuant to Article 7 of Council Regulation (EC) No 58/2003 is managed by a "Steering Committee" and a director. The term "management board" should therefore be replaced by the term "Steering Committee" throughout the text of the draft Commission regulation(6).

3. Article 9 of the draft Commission regulation lays down the possibility of carrying over "appropriations corresponding to obligations duly contracted at the close of the financial year". According to the same draft article, these appropriations shall be cancelled if not committed by 31 March of the following financial year. However, according to Article 44 of the draft Commission regulation and the corresponding provisions of the general Financial Regulation, before entering a legal obligation a budgetary committment must be made. Therefore, only committed appropriations should be carried over. Appropriations that, at the end of the financial year, have still not been used for budgetary commitments should be cancelled.

4. In Articles 57 and 66 of its draft regulation the Commission sets out that the Court comments on the provisional accounts of the agency, makes an annual report and issues a statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions. This is not in line with Council Regulation (EC) No 58/2003 which mentions, in Article 14(3), a "report by the Court of Auditors", but does not refer to any comments by the Court on provisional accounts or the issuing of a statement of assurance. The draft Commission regulation should not define the Court's tasks further than Council Regulation (EC) No 58/2003 does. The Court considers that it has no obligation to comment on provisional accounts of these bodies set up by the Community or to issue a specific annual report on each executive agency.

5. Considering the effectiveness of the control of Community expenditure, the Court reiterates the recommendation made in paragraph 20 of its opinion No 8/2001 and encourages the Commission to provide, where appropriate, for a prior scrutiny of the agencies' accounts before their consolidation with the accounts of the Commission.

6. In its opinion No 8/2001 (points 14 to 16) the Court stated that the accounting for and presentation of the operating expenditure and the running costs of an executive agency, financed from the general budget, were not clear. This issue should be clarified in the present draft financial regulation. The Court also stated (point 17c) that the accounting for and presentation of expenditure on programmes funded by other sources than the general budget were not clear. This issue should equally be clarified in the present draft regulation.

This opinion was adopted by the Court of Auditors in Luxembourg on 4 December 2003.

For the Court of Auditors

Juan Manuel Fabra Vallés

President

(1) SEC(2003) 803 final of 11 July 2003.

(2) OJ L 11, 16.1.2003.

(3) Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 (OJ L 248, 16.9.2002).

(4) Opinion No 8/2001 on a proposal for a Council Regulation laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes (OJ C 345, 6.12.2001).

(5) This problem does not occur, for example, in the French wording of Council Regulation (EC) No 58/2003 and the draft Commission regulation, where different terms are consistently used to distinguish between administrative and operating expenditure.

(6) This problem does not occur, for example, in the French wording of Council Regulation (EC) No 58/2003 and the draft Commission regulation, where the same term is consistently used.