REPORT ON BUDGETARY AND FINANCIAL MANAGEMENT IN 2009

2010/C 124/01

TABLE OF CONTENTS

Report on budgetary and financial management in 2009

Annexes — Tables of budget implementation in 2009

Report on budgetary and financial management in 2009

Court of Justice of the European Union

1.   INTRODUCTION

This report which, in accordance with Article 122 of the Financial Regulation and Article 185 of the Implementing Rules, accompanies the accounts of the Court of Justice of the European Union for 2009, gives an account of, in particular, the rate of implementation of appropriations. Likewise, it offers a summary of the transfers of appropriations between various budget items carried out in the course of the 2009 financial year.

Chapter 2 of this Report gives an overview of budget implementation in 2009 and Chapter 3 examines in more detail the trends in budget lines according to budget chapters. Lastly, the annexes provide summary tables relating again to budget implementation in 2009.

In regard to judicial activity as such, readers are invited to consult the Annual Report of the Court of Justice of the European Union for 2009 on the Curia internet site (http://curia.europa.eu) which provides detailed information and statistics concerning the judicial activities of the Court of Justice, the General Court and the Civil Service Tribunal.

2.   OVERVIEW OF BUDGET IMPLEMENTATION IN 2009

2.1.   Revenue

The estimated revenue of the Court of Justice of the European Union for the financial year 2009 was EUR 38 338 000.

As shown in Table 1 below, the established entitlements in 2009 are EUR 40 712 090 and are 6,19 % higher than estimated (1).

Table 1

Estimated revenue and established entitlements

It will be noted that revenue-entitlements established in Title 4 (principally deductions from the remuneration of Members and staff in respect of taxes and social security contributions) represent a very high percentage of the total revenue (97,55 %), while revenue in Titles 5 and 9 (principally proceeds from the sale of publications, insurance refunds, telecommunication refunds and financial products) represents less than 2,45 % of the total.

Annexes II and III provide additional data on the whole of the revenue stream (revenue-entitlements carried over, revenue-entitlements established and revenue-entitlements collected).

It will be noted that revenue recovered (EUR 40 695 081) represents 99,96 % of established entitlements in 2009 (99,88 % in 2008).

As regards revenue from entitlements carried over from the preceding financial year, Table 2 below shows that, revenue in Title 5 represents most of the total revenue from entitlements carried over and used in 2009 (79,43 %). The amounts still to be recovered in Title 4 essentially correspond to the amounts to be recovered from national pension bodies in connection with transfers of pension rights.

Table 2

Revenue from entitlements carried over

2.2.   Expenditure

2.2.1.   Appropriations in the financial year

The appropriations entered in the budget of the Court of Justice of the European Union for the financial year 2009 were EUR 314 954 433.

As shown in Table 3 below, the budget implementation for 2009 amounts to EUR 311 345 642,44 and represents a very high rate of use of final appropriations of 98,85 %, which is an improvement as compared with 2008 (98,74 %).

It can also be noted that, as in previous years, nearly three quarters of the budget of the Court of Justice of the European Union is allocated to expenditure on staff (Title 1 expenditure).

Table 3

Commitments of appropriations in the financial year

Annexes IV, V and VI provide detailed additional data on the use of appropriations in the 2009 financial year (comparison with 2008, rate of overall implementation and details of implementation by budget line).

2.2.2.   Appropriations carried over

Table 4 below shows that of the appropriations carried over from 2008 to 2009, the total amount being EUR 14 617 407,12, a large proportion was used (86,30 %).

Table 4

Use of appropriations carried over

Annexes V and VI provide additional detailed data on the use of appropriations carried over from 2008 to 2009 (rate of overall implementation and details of implementation by budget line).

2.2.3.   Appropriations corresponding to assigned revenue

Mention must be made of the fact that, under Article 18 of the Financial Regulation, some revenue can be assigned to the financing of specific items of expenditure. Such assigned revenue therefore represents additional appropriations which can be used by the Court.

Table 5 below details, by chapter, the sums of assigned revenue carried over from one financial year to another and the assigned revenue established and collected during the financial year.

Table 5

Use of assigned revenue

As shown in Table 5, the appropriations of assigned revenue established in 2009 come to EUR 969 356, of which more than 86 % of the amount corresponds to the following items:

2.2.4.   Transfers of appropriations

In the course of 2009, the Court of Justice of the European Union made 25 budget transfers pursuant to Articles 22 and 24 of the Financial Regulation, representing a total of, EUR 9 345 304, a figure lower than the amount of the same type of transfers made in 2008 (EUR 10 931 540).

In accordance with the provisions of Articles 22(2) and 24(2), (3) and (4) of the Financial Regulation, nine transfers of appropriations were the subject of notification to the budgetary authority. Those transfers amount to EUR 7 948 000 (EUR 8 695 500 in 2008) and correspond to close to 85 % of the total sum of appropriations transferred in the financial year. As in 2008, a considerable proportion of those transfers (close to EUR 5 million) made it possible to increase the prepayments made towards the buildings project of renovating and extending the Court’s buildings in order to reduce future budget costs under the lease-purchase contract entered into with the Luxembourg authorities

In addition, 16 transfers within articles which were not notified to the budgetary authority, as provided for under Article 22(4) of the Financial Regulation, were made for a total of EUR 1 397 304 (EUR 2 236 040 in 2008) representing almost 15 % of the total sum of appropriations transferred in the financial year.

Annex I provides details of all of those transfers of appropriations and of the budget lines concerned.

3.   2009 BUDGET IMPLEMENTATION BY CHAPTER

3.1.   TITLE 1 — Persons working with the institution

As shown in Table 6 below, the final budget funding of Title 1 for the financial year 2009 is EUR 232 698 820, which represents almost 74 % of the total budget of the Court of Justice of the European Union. Those appropriations were committed to the extent of EUR 229 708 402,19, which is a very high rate of implementation of 98,71 % (98,46 % in 2008).

Table 6

Use of appropriations in the financial year

3.1.1.   Chapter 10 — Members of the institution

The final appropriations in this Chapter, amounting to EUR 29 967 000, were committed to the extent of EUR 29 104 251, a high rate of implementation of 97,12 % (97,60 % in 2008).

It should be noted that the majority of appropriations requested for the year 2009 for Chapter 10 had been calculated on the basis of a rate of increase in remunerations and other related costs of 3,3 % at 1 January 2009 whereas the actual increase fixed in December 2008 was only 3 %. Further, the rate of increase in remunerations anticipated at 1 July 2009 was 3,2 % whereas the rate of increase decided by the Council in late December 2009 was only 1,85 %. Because of those two differences (0,3 % over 12 months of remunerations and 1,35 % over 6 months) there has been a saving in appropriations as compared with the initial estimates.

In addition, it may also be noted that certain savings have been achieved in respect of budget items connected with expenditure under the Staff Regulations relating to the renewal of the terms of office of the Members of the three courts (temporary allowances, rights connected with entering the service, transfer or leaving the service). Such differences are the result of the normal process of drawing up the budget, which requires estimates for the renewal of the Members’ terms of office to be made at a very early stage (almost a year and a half before the renewal dates) and cautiously, whereas the actual renewal of the Members’ terms of office is then the product both of decisions of the Member States and of individual decisions of the Members of the courts.

Accordingly, it was possible to make certain transfers from appropriations in Chapter 10 to other Chapters of the budget, transfers which are detailed in Annex I. Apart from an increase in Item 1406‘External services in the linguistic field’ (EUR 0,35 million) in Chapter 14, those transfers have primarily been made to Item 2001‘Lease-purchase’ (EUR 1,6 million) within Chapter 20 of Title 2 (see comments below on appropriations in Chapter 20‘Buildings and associated costs’).

3.1.2.   Chapter 12 — Officials and temporary staff

The final appropriations in this Chapter, amounting to EUR 183 069 520, were committed to the extent of EUR 181 156 824, a very high rate of implementation of 98,96 % which is slightly better than in 2008 (98,72 %).

Such good results are the product of a very active recruitment policy on the part of all of the Court’s services. The proportion of posts filled is highly satisfactory in respect of posts granted in connection with the enlargement of 2004 and also most encouraging for posts created for the recent EU-2 enlargement. If non-enlargement posts are included, the proportion of posts filled as at 31 December 2009 is 98 %, a remarkable figure if the effect of ordinary staff turnover among all staff of the institution (1 931 posts) is taken into consideration.

The main reason for the under-spending of appropriations in Chapter 12 is the fact that the appropriations requested for the posts concerned to cover remunerations and associated costs for the financial year 2009 were calculated on the basis of a rate of increase in remunerations of 3,3 %, whereas the actual increase fixed in December 2008 was only 3 %. Further, the rate of increase in remunerations anticipated at 1 July 2009 was 3,2 % whereas the rate of increase decided by the Council in late December 2009 was only 1,85 %. Because of those two differences (0,3 % over 12 months of remunerations and 1,35 % over 6 months) there has been a saving in appropriations as compared with the initial estimates.

It must be stressed that the surplus is, relatively speaking, tiny, if one considers, first, the total amount in Chapter 12 (approximately 60 % of the Court’s total budget) and, second, the difficulties involved in making budget estimates nearly 12 months in advance, using certain forecasting parameters that necessarily produce approximations (rate of increase in salaries, rate of inflation, rate of recruitment or staff turnover …). The Court’s unceasing efforts in recent years (in terms of the quality of its forecasting and of the annual management of the budget) have, moreover, made it possible to reduce existing surpluses, a trend which has been maintained in 2009.

Accordingly, it was possible to make certain transfers from appropriations in Chapter 12 to other chapters of the budget, transfers which are detailed in Annex I. Those transfers of appropriations have allowed, to a greater extent, an increase in Item 2001‘Lease-purchase’ (EUR 3,15 million) within Chapter 20 and, to a lesser extent, an increase in Item 2102‘External services for operation, creation and servicing of software and systems’ (EUR 0,53 million) within Chapter 21 of Title 2 (corresponding observations are included below in relation to the various chapters concerned).

3.1.3.   Chapter 14 — Other staff and external services

Generally, the final appropriations in this Chapter, amounting to EUR 14 952 300, were committed to the extent of EUR 14 879 939, a rate of implementation approaching 100 %, a clear improvement as compared with 2008 (97 %).

The final appropriations in Chapter 14 are allocated almost entirely to two budget Items. Almost one third of those appropriations relate to Item 1400‘Other staff’, where the rate of implementation remains very high (98,64 % as against 99,73 % in 2008). The remaining two thirds relate to Item 1406‘External services in the linguistic field’, where the rate of implementation reached 100 %, a clear improvement as compared with 2008 (96,98 %).

As regards the latter Item, which covers external services in both translation and interpreting, the reason for the improvement in the rate of implementation of appropriations is the need to meet an increased workload against a background of there being a limited number of internal linguistic staff (lawyer-linguists and interpreters).

It must be emphasised that, despite the various organisational measures taken in recent years by the Court in order to reduce the demand for translation, the translation workload increased by 6,7 % in 2009 and consequently greater use of external sub-contracting was necessary. For that reason, the appropriations intended to cover the services of freelance translators had to be increased by the sum of EUR 350 000 by means of a transfer from Chapter 10.

3.1.4.   Chapter 16 — Other expenditure relating to persons working with the institution

The final appropriations in this Chapter, amounting to EUR 4 710 000, were committed to the extent of EUR 4 567 388, which is a high rate of implementation of 96,97 % (98,5 % in 2008).

Two Items in this Chapter represent almost 78 % of the final appropriations: Item 1612‘Further training’, where the rate of implementation was 97,40 % (as against 97,8 % in 2008), and Item 1654‘Early childhood centre’ where the rate of implementation is, as in the previous year, 100 %.

3.2.   TITLE 2 — Buildings, furniture, equipment and miscellaneous operating expenditure

As shown in Table 7 below, the final budget funding in Title 2 for the financial year 2009 is EUR 82 215 613, representing slightly more than a quarter of the total budget of the Court of Justice of the European Union. Those appropriations were committed to the extent of EUR 81 605 809, which is a rate of implementation very close to 100 %, as in 2008.

Table 7

Use of appropriations in the financial year

3.2.1.   Chapter 20 — Buildings and associated costs

The final appropriations in this Chapter, amounting to EUR 59 732 500, were committed to the extent of EUR 59 710 997, or 99,96 % (99,68 % in 2008).

The final appropriations in Articles 200‘Buildings’ and 202‘Buildings-related costs’ represent respectively 73,6 % (EUR 43 980 000) and 26,4 % (EUR 15 752 500) of the total appropriations in this Chapter. Overall, those appropriations increased significantly (+ 33 %) as compared with 2008 because of the completion and the bringing into service of the new Palais building project (consisting of the renovated old Palais, a ring surrounding the Palais, two high towers and a gallery linking the old and new buildings).

As regards Article 200‘Buildings’, expenditure in Item 2000‘Rent’ was EUR 10 542 297 (100 % rate of implementation) corresponding to the rental of four buildings (Allegro, Geos, the T Building and the T bis Building) the occupation of which remains in any event necessary because of the staff numbers and the unavailability of the old buildings Annexes A, B and C which are undergoing substantial renovation to bring them into compliance with various national standards which have come into force since their construction (between 1986 and 1993).

Expenditure in Item 2001‘Lease-purchase’ was almost EUR 32 million (rate of implementation of 100 %), which represents a significant increase (+ 51 %) as compared with 2008 (EUR 21 million). The appropriations committed in 2008 corresponded only to certain partial prepayments pending completion of the construction of the new Palais, whereas the 2009 appropriations are intended to meet the falling due of further lease-purchase charges (calculated in accordance with the contract signed on 13 June 2007 with the Luxembourg authorities) which became payable upon the bringing into service, in late 2008, of the new Palais building complex. It should be noted that, in the interests of sound financial management, and as has already been mentioned above, certain surplus appropriations released in Chapters 10 and 12 of the budget were able to be assigned to prepayments over and above those previously made in 2007 and 2008. Such a transaction is entirely in accord with the expressed wishes of the two arms of the budgetary authority concerning the Community institutions’ building projects, in order to restrict the burden on future budgets imposed by those projects.

As regards expenditure in Article 202‘Buildings-related costs’, that amounts to EUR 15 748 248 (100 % rate of implementation) and corresponds, almost entirely, to expenditure on cleaning and maintenance, energy consumption and security/surveillance which are required to ensure that the buildings of the Court operate effectively. The significant increase in such expenditure (+ 50 %) is directly linked to the operational use of the new Palais building complex. It should be noted that the initial appropriations had to be increased (by internal reorganisation of appropriations in Chapter 20) to take account of the actual conditions of operational use as compared with the operational assumptions made when the appropriations for the 2009 budget were estimated in February 2008.

3.2.2.   Chapter 21 — Data processing, equipment and movable property

The final appropriations in this Chapter, amounting to EUR 15 868 113, were committed to the extent of EUR 15 636 608, or 98,54 % (99,74 % in 2008).

The final appropriations of Chapter 21 relate very substantially (88 %) to expenditure linked to IT and movable property.

Unlike expenditure in Chapter 20, a significant reduction can be seen in the expenditure of Chapter 21 (– 22,50 % as compared with 2008). Part of the 2008 appropriations corresponded to investment in IT hardware (inter alia, the installation of telephone networks and multimedia data networks) and furniture required for the bringing into service of the new Palais building complex.

As regards Article 210‘Equipment, operating costs and data-processing and telecommunications services’, current resources have, as in previous years, been applied to the regular renewal of the stock of hardware, the servicing of existing systems, to current support operations and to new judicial or administrative IT development projects.

In that context, Item 2102‘External services for operation, creation and servicing of software and systems’ had to be increased by EUR 535 000 (from Chapter 12) in order to address certain temporary difficulties in recruiting IT staff by using the services of external subcontractors to ensure that the 2009 work programme priorities could be met.

As regards Article 212‘Furniture’, 100 % of the allocated appropriations were committed. Those appropriations were devoted, as planned, to purchasing additional furniture and to renewing some of the furniture (acquired more than 15 years ago).

3.2.3.   Chapter 23 — Current administrative expenditure

The final appropriations in this Chapter, amounting to EUR 2 335 500, were committed to the extent of EUR 2 059 427, or 88,18 % (99,18 % in 2008).

A significant reduction to be seen in the expenditure in Chapter 23 (– 23,50 % as compared with 2008) is due to the fact that part of the 2008 appropriations (EUR 1,2 million) was allocated to the large operation of moving the Members and staff into the new buildings which were brought into service at the end of 2008.

For the financial year 2009, over 78 % of the appropriations in this Chapter were allocated to two types of expenditure:

In respect of those two Articles, a not insubstantial saving in appropriations is partly due to the institution’s efforts in the area of the electronic transfer of documents.

Lastly, the expenditure in Article 238‘Other administrative operating expenditure’, which includes the costs of moving, fell significantly (– 63 %) as compared with 2008 for the reasons explained above. However, an increase of EUR 132 000 (from Chapter 20) was necessary to deal with some specific moving (of staff and archives) which could not take place in 2008 because of the timetable for the completion of some work.

3.2.4.   Chapter 25 — Expenditure on meetings and conferences

The final appropriations in this Chapter, amounting to EUR 796 500, were committed to the extent of EUR 743 015, or 93,28 % (96,71 % in 2008).

These appropriations are, largely, devoted to expenditure linked to the ceremonial activities of the Court and to expenditure devoted to visits to the Court.

In 2009, ceremonial activity was marked by three significant events:

The organisation of visits to the Court of Justice is in response to the need to improve the communication of information on the Court and on European Union case-law to legal practitioners and students of law. By organising contacts with national judges (meetings and seminars), the Court continues to pursue the dual objective of both making national judges aware of how the Court operates, of the preliminary ruling procedure and the practice of European Union law and also offering to the judges a forum where they can meet each other. In 2009, a new approach involving the organisation of specialised seminars aimed at judges of national Constitutional Courts and Supreme Courts was initiated.

Since budget estimates for both these types of activity are by nature more liable to change, the level of activity in 2009 made it necessary to reorganise appropriations of EUR 60 000 within Chapter 25.

3.2.5.   Chapter 27 — Information: acquisition, archiving, production and distribution

The final appropriations in this Chapter, amounting to EUR 3 483 000, were committed to the extent of EUR 3 455 762, or 99,22 % (99,81 % in 2008).

The appropriations in this Chapter were allocated to two types of expenditure which contribute in full to the Court’s judicial activity:

3.3.   TITLE 3 — Expenditure resulting from special functions carried out by the institution

Chapter 37 —   Expenditure relating to certain institutions and bodies

The final budget funding in Title 3 consists solely of the appropriations in Chapter 37 for Item 3710‘Court expenses’. In the 2009 financial year, those appropriations amounted to EUR 40 000 and were committed to the extent of EUR 31 431, a rate of implementation of 78,58 %.

The expenditure in question, for which the Court is liable, relates to legal aid, covering lawyers’ fees and other expenses. It is difficult to estimate such expenditure because the budget implementation varies greatly from year to year.

3.4.   TITLE 10 — Other expenditure

Chapter 10 0 —   Provisional appropriations

No budget funding was allocated to Title 10 in the 2009 financial year.

(1)  That difference is reduced to 1,5 % if account is taken of assigned revenue available for re-employment which, in accordance with budgetary practice, is presented as a token entry (‘p.m.’ or pour memoire) when the initial budget is drawn up but which is duly taken into account in that same budget via a deduction from the budget items of the expenditure concerned.