10.12.2014 |
EN |
Official Journal of the European Union |
C 442/275 |
REPORT
on the annual accounts of the European Foundation for the Improvement of Living and Working Conditions for the financial year 2013, together with the Foundation’s replies
(2014/C 442/32)
INTRODUCTION
1. |
The European Foundation for the Improvement of Living and Working Conditions (hereinafter ‘the Foundation’, aka ‘Eurofound’), which is located in Dublin, was established by Council Regulation (EEC) No 1365/75 (1). The Foundation’s task is to contribute to the planning and establishment of better living and working conditions in the Union by increasing and disseminating knowledge which is relevant to this subject (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 Foundation’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 RELIABILITY OF THE ACCOUNTS
11. |
The Foundation carried out a comprehensive physical inventory exercise at the end of 2013 and the beginning of 2014. At the time of the Court’s audit in February 2014, a physical inventory report had not yet been finalised. Tests carried out by the Court revealed that not all fixed assets were barcoded and recorded in the register and accounts. Equipment with a value of 2 09 843 euro (8) had been expensed instead of being capitalised, the error was corrected following the Court’s audit. Some assets could not be traced to the suppliers’ delivery notes in order to ensure the correct starting date for the calculation of the depreciation charge. |
COMMENTS ON INTERNAL CONTROLS
12. |
The facts presented in paragraph 11 represent considerable internal control weaknesses in the area of fixed assets registration and accounting. |
COMMENTS ON BUDGETARY MANAGEMENT
13. |
In 2013, the overall level of committed appropriations was 99 %, indicating that commitments were made in a timely manner. However, the level of committed appropriations carried over to 2014 however was high at some 6 62 831 euro (35,6 %) for title II (administrative expenditure) and some 3 3 75 781 euro (48,6 %) for title III (operating expenditure). |
14. |
Carry-overs of committed title II appropriations mainly related to the procurement of IT hard- and software (2 81 934 euro, of which purchases amounting to 1 89 934 euro were originally planned for 2014), urgent and unforeseen repair works (69 000 euro) and refurbishment works to be contracted and planned for the beginning of 2014 (2 30 718 euro). |
15. |
For title III, committed appropriations carried over amounting to 2 6 25 543 euro concerned multiannual projects for which activities were implemented and payments were made according to schedule. Unplanned carry-overs of 7 50 238 euro mainly related to an increase in the budget for several projects to enhance their scope and quality (65 %), translation services ordered in December 2013 but originally planned for 2014 (14 %), delays in procurement procedures (7 %), late invoicing by contractors (14 %) and other events beyond the Foundation’s control. |
OTHER COMMENTS
16. |
The Foundation became operational in 1975 and has, to date, worked on the basis of correspondence and exchanges with the host Member State. However, a comprehensive headquarters agreement between the Foundation and the Member State has not been signed. Such an agreement would further promote transparency in respect of the conditions under which the Foundation and its staff operate. |
This Report was adopted by Chamber IV, headed by Mr Milan Martin CVIKL, Member of the Court of Auditors, in Luxembourg at its meeting of 8 July 2014.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 139, 30.5.1975, p. 1.
(2) Annex I summarises the Foundation’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 Regulation (EU) No 1271/2013.
(8) Air conditioning system and other equipment in the Foundation’s Conference Centre.
ANNEX I
European Foundation for the Improvement of Living and Working Conditions (Dublin)
Competences and activities
Areas of Union competence deriving from the Treaty (Article 151 of the Treaty on the Functioning of the European Union) |
The Union and the Member States, having in mind fundamental social rights such as those set out in the European Social Charter signed at Turin on 18 October 1961 and in the 1989 Community Charter of the Fundamental Social Rights of Workers, shall have as their objectives the promotion of employment, improved living and working conditions, so as to make possible their harmonisation while the improvement is being maintained, proper social protection, dialogue between management and labour, the development of human resources with a view to lasting high employment and the combating of exclusion. [...] |
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Competences of the Foundation (Council Regulation (EEC) No 1365/75, as amended by Regulation (EC) No 1111/2005) |
Objectives The aim of the Foundation shall be to contribute to the establishment of better living and working conditions by increasing and disseminating knowledge which is relevant to this subject. In particular, it is required to consider the following areas:
Tasks
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Governance |
The Governing Board (GB)
The Bureau of the GB
The Director and Deputy Director are appointed by the Commission from a list of candidates submitted by the GB. The Director implements the decisions of the GB and its Bureau and manages the Foundation. Internal audit European Commission’s Internal Audit Service (IAS). External audit European Court of Auditors. Discharge authority European Parliament acting on recommendation of the Council. |
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Resources available to the Foundation in 2013 (2012) |
Budget 20,6(21,4) million euro Staff at 31 December 2013 Officials and temporary staff: 101 posts provided for in the establishment plan, of which 99 (98) were occupied at 31 December 2013 Other staff: Seconded National Experts: 0 (0) Contract staff: 13 (12) Total staff employed: 112 (110) Allocated to: Operating activities: 78 (77) Administrative tasks: 29 (28) Mixed: 5 (5) |
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Activities and services provided in 2013 |
Increasing labour market participation and combating unemployment by creating jobs, improving labour market functioning and promoting integration
Improving working conditions and making work sustainable throughout the life course
Developing industrial relations to ensure equitable and productive solutions in a changing policy context
Improving standards of living and promoting social cohesion in the face of economic disparities and social inequalities
Communication and sharing ideas and experience
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Source: Annex supplied by the Foundation. |
THE FOUNDATION’S REPLIES
11. |
The physical inventory report was in the meantime finalised and published. Mistakes in relation to barcoding and registration have been rectified. Due to the low value of the items involved they are not considered assets and, therefore, the impact of these mistakes on the financial accounts was zero. In all cases there is now a copy of the delivery note attached to the invoice which ensures proper tracing of the correct starting date for calculation of the depreciation. |
12. |
The weaknesses in the area of fixed assets registration and accounting were largely due to the transition period towards a new assets accounting system. This is now remedied by the full implementation of ABAC Assets and substantial changes in the internal workflows. |
13.-15. |
The figures and analysis are accepted and confirmed. The high level of carry-overs relating to services originally planned for 2014 (43 % of all unplanned carry-overs) are due to the decisions on staff salaries for 2011 and 2012 which were taken late in 2013 and led to some available budget left. To ensure a high level of budget execution it was decided to use up the available funds according to the advice received from the Commission. Carry-overs (excl. those related to activities planned for 2014 and brought forward) show that less than 20 % were unplanned and partly outside Eurofound’s control. |
16. |
For over 30 years Eurofound had quite detailed arrangements with the Irish government on the application of the Protocol on Privileges and Immunities. Nevertheless, in early February Eurofound started negotiations on this topic with a view to come to an agreement with the Irish government by the end of 2014. |