10.12.2014 |
EN |
Official Journal of the European Union |
C 442/35 |
REPORT
on the annual accounts of the Translation Centre for the Bodies of the European Union for the financial year 2013, together with the Centre’s replies
(2014/C 442/04)
INTRODUCTION
1. |
The Translation Centre for the Bodies of the European Union (hereinafter ‘the Centre’, aka ‘CdT’), which is located in Luxembourg, was created by Council Regulation (EC) No 2965/94 (1). The Centre's task is to provide any European Union institutions and bodies which call upon its services with the translation services necessary for their activities (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 Centre’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
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 THE LEGALITY AND REGULARITY OF TRANSACTIONS
11. |
In 2008 the Centre concluded 472 framework contracts with translation services providers for a maximum period of four years. In order to obtain better conditions for the new framework contracts to be signed in 2012, the Centre wanted to participate in the Commission’s ongoing procurement procedure for translation services. However, no agreement on the contract terms could be reached with the Commission. Instead, the Centre extended its existing framework contracts for one more year. Although based on a derogation duly approved by the Centre’s Director, such an extension is not in compliance with the implementing rules for the Centre’s financial regulation, which provide for a maximum period of four years for framework contracts. |
COMMENTS ON INTERNAL CONTROLS
12. |
Formal delegations (sub-delegations) from authorising officers (authorising officers by delegation) are not always consistent with the authorisation rights for transactions in the ABAC accounting system. |
OTHER COMMENTS
13. |
Cash held by the Centre further increased from 35 million euro at the end of 2012 to 40 million euro at the end of 2013 (budgetary surplus and reserves increased from 30,9 million euro to 37,5 million euro). This indicates scope to reduce prices. |
14. |
The Centre became operational in 1994 and has, to date, worked on the basis of correspondence and exchanges with the host Member State. However, there is no comprehensive headquarters agreement between the Centre and the Member State. Such an agreement would further promote transparency in respect of the conditions under which the Centre and its staff operate. |
FOLLOW-UP OF PREVIOUS YEAR’S COMMENTS
15. |
An overview of the corrective actions taken in response to the Court's comments from the previous year is provided in Annex I. |
This Report was adopted by Chamber IV, headed by Mr Pietro RUSSO, Member of the Court of Auditors, in Luxembourg at its meeting of 16 September 2014.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 314, 7.12.1994, p. 1.
(2) Annex II summarises the Centre'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 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 Delegated Regulation (EU) No 1271/2013.
ANNEX I
Follow-up of previous year’s comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2012 |
At the end of 2012, the Centre held cash and short term deposits amounting to 35 million euro (budgetary surplus and reserves amounting to 30,9 million euro). The Centre cannot adjust prices during the year in order to balance income and expenditure although it has occasionally refunded its clients in order to reduce the surplus. |
Ongoing |
2012 |
The Founding Regulation of 20 regulatory agencies audited by the Court in 2012 requires them to use the Centre for all their translation needs (the Centre’s Founding Regulation stipulates the same for four other agencies). Other agencies are not obliged to use the Centre. For non-technical documents agencies could reduce their costs by using local services. In the Court’s opinion the legislator should consider allowing all agencies to do so. |
Ongoing |
ANNEX II
Translation Centre for the Bodies of the European Union (Luxembourg)
Competences and Activities
Areas of Union competence deriving from the Treaty |
The representatives of the Member States’ governments adopted by mutual agreement a declaration concerning the creation, under the aegis of the Commission's translation departments in Luxembourg, of a Translation Centre for the bodies of the Union, which would provide the necessary translation services for the operation of the bodies and services whose seats were established by the Decision of 29 October 1993. |
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Competences of the Centre (Council Regulation (EC) No 2965/94, as last amended by Regulation (EC) No 1645/2003) |
Objectives To provide the necessary translation services for the operation of the following bodies:
Bodies set up by the Council other than the above may use the Centre's services. The institutions and bodies of the European Union which already have their own translation services may, if need be, call upon the Centre's services on a voluntary basis. The Centre plays a full part in the work of the Interinstitutional Translation Committee. Tasks
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Governance |
Management Board Composition
Tasks To adopt the Centre’s annual budget and work programme, establishment plan and annual reports. Director Appointed by the Management Board on a proposal from the Commission. External audit European Court of Auditors. Internal audit European Commission's Internal Audit Service (IAS). Discharge authority European Parliament, acting on a recommendation from the Council. |
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Resources made available to the Centre in 2013 (2012) |
Final Budget: 52,194(48,293) million euro Staff: 206 posts (225) in the establishment plan, of which 193 (199) were occupied. + 23 (17) contract staff Total staff: 216 (216), undertaking the following tasks: operational: 118 (114) administrative: 98 (102) |
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Products and services 2013 (2012) |
Number of pages translated: 8 04 986(7 35 007) Number of pages by languages:
Number of pages per client:
Number of pages translated by freelances: 5 12 524(4 80 695) |
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Source: Annex supplied by the Centre. |
THE CENTRE’S REPLIES
11. |
The Centre had joined the Commission’s call for tenders for this type of translation services in the past. Concerning the call for tenders referred to, the Commission began its preparatory work at a rather late stage and changed the conditions applicable to the Centre so that they differed from the call for tenders organised four years previously. Unfortunately, the Centre could not reach an agreement with the Commission as regards the conditions. Furthermore, the starting date for the new contracts did not coincide with the expiry date of the contracts in place and this resulted in practical problems for the Centre. The Centre, therefore, decided to organise its own call for tenders for this specific type of translation services and to extend existing contracts by one year in order to prepare correctly for this extensive call for tenders. Considering the impact on the Centre in the event that no contracts had been in place on the expiry date of the existing contracts, it was considered justified to prolong the existing contracts. |
12. |
The Centre has updated the formal delegation to bring it in line with the rights in ABAC. The internal procedure in place to keep delegations in ABAC updated has been modified slightly to avoid any discrepancies between rights in ABAC and the formal delegations. |
13. |
The Centre is fully aware that it generated an economic surplus for the second consecutive year, but it must be noted that the 2013 surplus came about as a result of external factors beyond the Centre’s control; especially as a result of a higher volume of invoiced pages than forecast, the cancelled salary increase and the pension contribution reimbursed to the Centre. The Centre’s 2013 budget was prepared in 2012 in the light of the economic loss of EUR 1 million in 2011 and considering that revenues from Community trademarks were particularly uncertain. It was only in December 2012, in the preliminary draft budget for 2014, when the Centre could react to the financial results by proposing the 2014 budget with a deficit of EUR 1 0 92 890, financed from the previously created price stability reserve. Based on the 2012 cost analysis and analysis of the first half of 2013 the Centre decreased the 2014 prices considerably in order to reflect not only changes in the cost of products, but also to use up part of the surplus. The 2014 budget was, therefore, constructed as a deficit budget from the outset; the deficit of EUR 4 1 06 650 is balanced by the reserve for price stability created in previous years. The 2015 budget will, again, be prepared as a deficit budget in order to use up part of the previous years’ surplus. Based on the 2014 mid-year cost analysis and simulations and forecasted volumes for 2015, further price modifications will be proposed for 2015. As an additional measure, the Centre, for the first time in its history, proposed that the Management Board further reduce 2014 prices in the middle of 2014, in order to respond more quickly and return back to its clients the positive financial results of 2013. |
14. |
The works on the headquarters agreement have come into a final phase. The draft agreement was submitted to Luxembourg’s Conseil de Gouvernement and was discussed and approved during its meeting at the end of April. The Centre is waiting for confirmation of a date for the signature of the agreement by the Luxembourg authorities. |