10.12.2014

Official Journal of the European Union

C 442/1

Summary of the results of the Court’s 2013 annual audits of the European Agencies and other bodies

(2014/C 442/01)

CONTENTS

Paragraph

Page

Introduction

1 — 5

Information in support of the Court’s opinions

Audit results

7 — 20

Opinions on the reliability of the accounts

7 — 8

Opinions on the legality and regularity of the transactions underlying the accounts

9 — 11

Comments not calling the Court’s opinions into question

12 — 20

Comments on the reliability of accounts

Comments on the legality and regularity of transactions

Comments on internal controls

Comments on budget implementation

17 — 18

Other comments

Follow-up of previous years’ comments

Conclusions

21 — 23

ANNEX I —

Agencies’ income (budget forecasts, entitlements established and amounts received) and staff establishment plans

ANNEX II —

Comments made by the Court in 2013, not calling its opinion into question

ANNEX III —

Follow-up of open 2011 and 2012 comments not calling the Court’s opinions into question

INTRODUCTION

Pursuant to the provisions of Article 287 of the Treaty on the functioning of the European Union, the Court has audited the annual accounts (1) for the financial year ended 31 December 2013 and the legality and regularity of the transactions underlying them for 32 decentralised agencies (2), 6 executive agencies, the Euratom Supply Agency (Euratom), the European Institute of Innovation and Technology (EIT) and the Europol Pension Fund (hereinafter ‘agencies’). Details on the audited agencies, their budgets and staff are provided in Annex I.

This summary provides an overview of the results of the Court’s annual audits of the agencies for the financial year 2013. It aims to facilitate analysis and comparison of the Court’s 41 specific reports on the 2013 annual accounts of the agencies. The Court’s opinions and comments as well as the agencies’ replies can be found in these specific reports. This summary is not an audit report or opinion.

Decentralised agencies play an important role in implementing EU policies, especially tasks of a technical, scientific, operational and/or regulatory nature. Their aim is to allow the Commission to concentrate on policymaking and to reinforce cooperation between the EU and national governments by pooling technical and specialist expertise from both sides. They are located throughout the EU. Executive agencies assist the Commission in the implementation of Union spending programmes. They are set up for a fixed period and based in the same location as the Commission.

The agencies’ 2013 budget amounted to some 2 billion euro (2012: EUR 1,6 billion euro), i.e. about 1,4 % of the EU general budget (2012: 1,2 %). Approximately 1 billion euro comes from the European Commission’s subsidies and the rest is income from fees and other sources. The agencies employ some 6 500 (2012: 6 100) permanent and temporary officials, i.e. 14 % (2012: 13 %) of the total number of EU officials authorised under the EU general budget (staff establishment plan). In addition, some 2 900 other staff are working for the agencies (contract or seconded staff).

Whereas financial risk related to the agencies is relatively low compared to the total EU budget, the reputational risk for the Union is high: they are highly visible in the Member States and they have significant influence on policy- and decision-making and programme implementation in areas of vital importance to European citizens, i.e. health, safety, security, freedom and justice.

INFORMATION IN SUPPORT OF THE COURT’S OPINIONS

The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of the agencies’ internal controls. This is supplemented by evidence provided by the work of other auditors (where relevant) and an analysis of management representations. In order to consider the particular risks involved, the 2013 audit placed special emphasis on the legality and regularity of grant transactions (in the 11 agencies concerned, see Annex II) and related internal controls. The audit of recruitment procedures focused on a follow-up of previous years’ findings.

AUDIT RESULTS

Opinions on the reliability of the accounts

The final accounts of all agencies present fairly, in all material respects, their financial position as at 31 December 2013 and the results of their operations and their cash flows for the year then ended, in accordance with the provisions of the applicable Financial Regulations and the accounting rules adopted by the Commission’s Accounting Officer.

Without calling into question its opinion expressed for eu-LISA, the Court’s emphasis of matter (3) paragraph draws attention to the valuation of the Schengen Information System (SIS II), the Visa Information System (VIS) and Eurodac (systems) in the Agency’s accounts. The operational management of these systems was transferred to the Agency from the Commission in May 2013 by way of a non-exchange transaction and is the core task of the Agency. In the absence of reliable and complete information in respect of their total development cost, they are recorded in the Agency’s accounts at their net book values as per the Commission’s books and updated at year end. These values relate mainly to hardware and off-the-shelf software components and do not include software development costs.

Opinions on the legality and regularity of the transactions underlying the accounts

As was the case last year, the Court concluded that the transactions underlying the annual accounts for the year ended 31 December 2013 were legal and regular in all material respects for all agencies except EIT and Frontex (European Agency for the Management of Operational Cooperation at the External Borders).

10.

A qualified opinion (4) was issued for EIT. Despite further improvements in the Institute’s ex ante and ex post verifications, a material, but not pervasive level of error was found in relation to the legality and regularity of grant transactions and to procurements.

11.

The Court also issued a qualified opinion for Frontex. There is still insufficient audit evidence on the legality and regularity of grant transactions. Despite the introduction of more comprehensive ex ante verifications for grant agreements signed since June 2013, the majority of 2013 transactions resulted from grant agreements signed before that date. The possible effects are material but no longer pervasive, as was the case last year (5).

Comments not calling the Court’s opinions into question

12.

Without calling its opinions into question, the Court made a total of 97 (2012: 123) comments affecting 35 agencies to highlight matters of importance and to indicate room for improvement. Comments were made regarding the reliability of accounts, the legality and regularity of transactions, internal controls, budget implementation and other matters such as sound financial management. Having audited recruitment procedures in detail for several years, the 2013 audit was a follow-up of previous years’ findings in this area (hence the decrease in the number of comments) (6).

Chart 1

Number of comments by heading

Source: Specific reports on the agencies’ 2013 annual accounts.

13.

An overview of the comments made for each of the agencies is provided in Annex II. A summary of the most frequent comments is provided below.

Comments on the reliability of accounts

14.

Four comments were made in relation to four agencies and addressed weaknesses in the recording of accruals, the completeness of notes to the financial statements, the accounting of fixed assets and the reconciliation of suppliers’ statements at year-end. (Last year, five of the seven comments made related to non-validated accounting systems which have since been validated by the agencies’ accountants.)

Comments on the legality and regularity of transactions

15.

The seven comments concern seven agencies. Six of them relate to weaknesses in procurement procedures in areas such as transparency of the outsourcing procedures, consistency between contract notice and tender specifications, the consistent application of eligibility/selection criteria, and the extension of framework contracts. Last year, the same number of comments was made on procurement procedures.

Comments on internal controls

16.

The 17 comments (2012: 34) concern 10 agencies (2012: 22). In four cases (2012: five) they related to weaknesses in the implementation of internal control standards, either because they had not been adopted at year-end or they were adopted but only partially implemented, or corrective action was still ongoing. A positive development is the decrease in comments made on fixed assets management (from seven in 2012 to two in 2013) and grant management (from five in 2012 to two in 2013).

Comments on budget implementation

17.

A high level of carry-overs of committed appropriations remains the most frequent comment in this area and concerned 24 (2012: 26) agencies. Although a high level of carry-overs is usually considered to be at odds with the budgetary principle of annuality and can indicate weaknesses in budget planning and implementation, it often resulted from events (partly) beyond the agencies’ control (e.g. invoices or cost declarations that had not been received by the year-end) or were justified by the multiannual nature of operations, procurement procedures or projects.

18.

High levels of cancellations of carry-overs from previous years were noted in seven cases (2012: nine). Such cancellations indicate that the appropriations carried over were made on the basis of overestimated needs or were otherwise not justified.

Other comments

19.

There were 22 (2012: 27) other comments which concerned 15 agencies (2012: 20). Six related to the absence of headquarter agreements with agencies’ host countries and 11 were to matters of sound financial management, for example:

—	the level of stand-by duty allowances paid,

—	agencies in multiple locations (even within the same Member State): it is likely that administrative costs could be reduced if all staff were centralised,

—	cash balances in a number of agencies were higher than justified by operational requirements (506 million euro in total).

Follow-up of previous years’ comments

20.

Annex III shows that for the 192 open comments at the end of 2012, in 2013 corrective action was completed in 94 cases, ongoing in 47 and outstanding in five cases (no corrective action was required for 46 comments, mainly in relation to budget carry-overs).

CONCLUSIONS

21.

All agencies prepared their accounts in accordance with the provisions of the applicable Financial Regulations and the accounting rules adopted by the Commission’s Accounting Officer.

22.

The Court concluded that transactions underlying the accounts were legal and regular for all except two agencies. Qualified opinions were issued for EIT and Frontex (mainly in relation to grant transactions).

23.

Agencies further improved their procedures by taking corrective action in response to the Court’s comments from previous years. Nevertheless, there is considerable room for improvement, as indicated by the high number of comments made in respect of 2013.

(1) These comprise the ‘financial statements’ and the ‘reports on the implementation of the budget’.

(2) The European Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice (eu-LISA) was granted financial autonomy by the Commission on 22 May 2013 and was audited by the Court for the first time in 2013.

(3) An Emphasis of Matter paragraph is used to draw readers’ attention to a matter which is not materially misstated in the accounts, but is of such importance that it is fundamental to users’ understanding of the accounts.

(4) The Court expresses a qualified opinion when the auditor has obtained sufficient appropriate audit evidence and concludes that misstatements or instances of non-compliance are material, but not pervasive, to the annual accounts or underlying transactions (as outlined in paragraph 10). The Court also expresses a qualified opinion when the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, and the possible effects on the annual accounts or underlying transactions of that inability are material but not pervasive (as outlined in paragraph 11).

(5) The Court gave a disclaimer of opinion for the financial year 2012.

(6) In 2013, the Court made 3 recruitment-related comments (2012: 17).

ANNEX I

Agencies' income (budget forecasts, entitlements established and amounts received) and staff establishment plans

			2013						2012
Agency	Parent DG	Policy Area	Forecasted income budget (2) (million euro)	Change of forecasted Income budget 2013 vs 2012	Entitlements established (2) (million euro)	Amounts received (2) (million euro)	Staff establishment plan (3)	Change of establishment plan 2013 vs 2012	Forecasted income budget (4) (million euro)	Entitlements established (4) (million euro)	Amounts received (4) (million euro)	Staff establishment plan (3)
Decentralised Agencies
European Medicines Agency — EMA	SANCO	Health and Consumer	252	14 %	269	240	611	4 %	222	254	224	590
Office for Harmonization in the Internal Market — OHIM	MARKT	Internal Market and Services	418	-3 %	189	189	861	11 %	429	176	176	775
European Aviation Safety Agency — EASA	MOVE	Mobility and Transport	151	1 %	125	125	692	9 %	150	116	115	634
European Agency for the Management of Operational Cooperation at the External Borders — Frontex	HOME	Home Affairs	94	4 %	92	92	153	7 %	90	76	76	143
European Police Office — Europol	HOME	Home Affairs	83	-1 %	83	83	457	0 %	84	83	83	457
European Food Safety Authority — EFSA	SANCO	Health and Consumer	76	-1 %	76	76	351	-1 %	77	77	77	355
European Maritime Safety Agency — EMSA	MOVE	Mobility and Transport	57	-3 %	58	56	213	0 %	59	54	53	213
European Centre for Disease Prevention and Control — ECDC	SANCO	Health and Consumer	58	0 %	59	59	198	-1 %	58	58	58	200
Translation Centre for the Bodies of the European Union — CdT	DGT	Translation	52	8 %	54	50	206	-6 %	48	49	45	220
European Environment Agency — EEA	ENV	Environment	49	17 %	63	63	138	1 %	42	52	51	136
European Body for the Enhancement of Judicial Cooperation — Eurojust	JUST	Justice	32	-3 %	32	32	213	0 %	33	33	33	213
European Chemicals Agency — ECHA	ENTR	Enterprise and Industry	99	200 %	98	98	503	7 %	33	35	35	470
European Railway Agency — ERA	MOVE	Mobility and Transport	26	0 %	26	26	143	-1 %	26	26	26	144
European Union Agency for Fundamental Rights — FRA	JUST	Justice	22	5 %	22	22	78	4 %	21	21	21	75
European Banking Authority — EBA	MARKT	Internal Market and Services	26	24 %	26	26	93	37 %	21	19	19	68
European foundation for the improvement of living & working conditions — Eurofound	EMPL	Internal Market and Services	21	0 %	21	21	101	0 %	21	21	21	101
European Training Foundation — ETF	EAC	Education and Culture	20	-5 %	22	22	96	0 %	21	20	20	96
European Securities and Markets Authority — ESMA	MARKT	Internal Market and Services	28	40 %	30	30	121	61 %	20	19	19	75
European Centre for the Development of Vocational Training — Cedefop	EAC	Education and Culture	19	0 %	18	18	100	-1 %	19	20	20	101
European Insurance and Occupational Pensions Authority — EIOPA	MARKT	Internal Market and Services	19	19 %	18	18	80	16 %	16	14	14	69
European Monitoring Centre for Drugs and Drug Addiction — EMCDDA	HOME	Home Affairs	16	0 %	16	16	84	0 %	16	16	16	84
European Agency for Safety and Health at Work — EU-OSHA	EMPL	Internal Market and Services	15	0 %	16	16	44	0 %	15	15	15	44
Community Plant Variety Office — CPVO	SANCO	Health and Consumer	14	8 %	13	13	48	4 %	13	13	13	46
European GNSS Agency — GSA	ENTR	Enterprise and Industry	14	8 %	54	54	77	75 %	13	21	21	44
European Fisheries Control Agency — EFCA	MARE	Maritime Affairs & Fisheries	9	-10 %	9	9	54	0 %	10	10	10	54
European Institute for Gender equality— EIGE	JUST	Justice	7	-13 %	8	8	30	0 %	8	8	8	30
European Police College — CEPOL	HOME	Home Affairs	8	0 %	9	9	28	0 %	8	9	9	28
European Union Agency for Network and Information Security — ENISA	CONNECT	Communication Networks, Content and Technology	10	25 %	10	9	47	0 %	8	8	8	47
Agency for the Cooperation of Energy Regulators — ACER	ENER	Energy	12	71 %	12	12	49	14 %	7	7	7	43
European Asylum Support Office — EASO	HOME	Home Affairs	11	57 %	10	10	45	18 %	7	2	2	38
Office of the Body of European Regulators for Electronic Communications — BEREC	CONNECT	Communication Networks, Content and Technology	4	33 %	4	4	16	0 %	3	3	3	16
European Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice — eu-LISA	HOME	Home Affairs	34		19	19	120	financially autonomous from 2013	n/a	n/a	n/a	n/a
Executive Agencies
Education, Audiovisual and Culture Executive Agency — EACEA	EAC	Education and Culture	51	2 %	52	52	105	2 %	50	50	50	103
Research Executive Agency — REA	RTD	Research and Innovation	47	2 %	47	47	140	9 %	46	47	47	128
European Research Council Executive Agency — ERCEA	RTD	Research and Innovation	40	3 %	40	40	100	0 %	39	39	39	100
Executive Agency for Competitiveness and Innovation — EACI	ENER	Energy	16	0 %	16	16	37	0 %	16	17	17	37
Trans-European Transport Network Executive Agency — TEN-T EA	MOVE	Mobility and Transport	10	0 %	10	10	33	0 %	10	10	10	33
Executive Agency for Health and Consumers — EAHC	SANCO	Health and Consumer	7	0 %	7	7	12	0 %	7	7	7	12
Other Bodies
European Institute of Innovation and Technology — EIT	EAC	Education and Culture	99	27 %	97	97	34	21 %	78	77	77	28
Euratom Supply Agency (1) — Euratom	ENER & RTD	Energy & Research and Innovation	0,1	0 %	0,1	0,1	25	0 %	0,1	0,1	0,1	25
Europol Pension Fund — EPF	HOME	Administrative Expenditure of Europol	n/a		n/a	n/a	n/a		n/a	n/a	n/a	n/a
Total			2 026	10 %	1 830	1 794	6 536	8 %	1 844	1 582	1 545	6 075
											2013	2012
			Commission subsidy part in agencies’ income:								51,9 %	64,0 %
			Agencies’ forecasted income budget in comparison with EU general budget:								1,4 %	1,4 %
			Agencies’ staff stablishment plan in comparison with total under the EU general budget:								14,0 %	13,1 %

(1) Euratom Supply Agency is not consolidated in the EU annual accounts.

(2) According to 2013 provisional consolidated EU annual accounts.

(3) Permanent and temporary EU officials (AD and AST) only, according to staff establishment plan. In addition, some 2 880 staff are working for EU agencies on the basis of temporary or secondment contracts.

(4) According to 2012 final consolidated EU annual accounts (adjusted for OHIM).

ANNEX II

Comments made by the Court in 2013, not calling its opinion into question

		Total No of comments	Reliability of accounts	Legality/Regularity of Transactions		Internal Controls				Budget Implementation					Other comments
		Total No of comments	Reliability of accounts	Weaknesses in procurement procedures	Other	ICS not fully implemented	Weak controls over fixed assets/stock taking	Weak grant controls	Other	High carry-overs	High budget transfers	High cancellations of 2012 carry-overs	Insufficient commitments	Other	Recruitment	SFM	No headquarters agreement with MS	Other
1	ACER — Ljubljana	3								X				X		X
2	BEREC — Riga	2										X				X
3	CdT — Luxembourg	4		X					X							X	X
4	Cedefop — Thessaloniki (1)	0
5	CEPOL — Bramshill (1)	3								X		X			X
6	EFCA — Vigo	1								X
7	CPVO — Angers	1											X
8	EACEA — Brussels	1								X
9	EACI — Brussels	1										X
10	EAHC — Luxembourg	3								X		X	X
11	EASA — Cologne	3		X						X							X
12	EASO — Valletta (1)	6	X			X			X	X				X	X
13	EBA — London	2								X			X
14	ECDC — Stockholm (1)	4		X						X		X	X
15	ECHA — Helsinki	2								X								X
16	EEA — Copenhagen (1)	1						X
17	EFSA — Parma (1)	3				X		X	X
18	EIGE — Vilnius	1								X
19	EIOPA — Frankfurt	4				X			XX	X
20	EIT — Budapest (1)	4			X					X		X	X
21	EMA — London	0
22	EMCDDA — Lisbon (1)	1		X
23	EMSA — Lisbon	0
24	ENISA — Heraklion	4								X			X			XX
25	ERA — Valenciennes	5							X						X	X	X	X
26	ERCEA — Brussels	0
27	ESMA — Paris	4								X	X					XX
28	ETF — Turin	1														X
29	eu-LISA — Tallinn	8				X	X							XXXX		X	X
30	EU-OSHA — Bilbao	1								X
31	Euratom — Luxembourg	2	X						X
32	Eurofound — Dublin	4	X				X			X							X
33	Eurojust — The Hague (1)	2								X	X
34	Europol — The Hague	2		X						X
35	EPF — The Hague	0
36	FRA — Vienna	1								X
37	Frontex — Warsaw (1)	5	X							X	X			X			X
38	GSA — Prague (1)	2		X						X
39	OHIM — Alicante	3								X		X				X
40	REA — Brussels	0
41	TEN-T EA — Brussels	3							XX	X
Subtotals:		97	4	6	1	4	2	2	9	24	3	7	6	7	3	11	6	2
Totals:		97	4	7		17				47					22
			4 %	7 %		18 %				48 %					23 %

(1) Grant management

ANNEX III

Follow-up of open 2011 and 2012 comments not calling the Court’s opinions into question

		Total	Completed	Ongoing	Outstanding	N/A
	Decentralised Agencies
1	European Medicines Agency — EMA	8	4	1		3
2	Office for Harmonization in the Internal Market — OHIM	5	2			3
3	European Aviation Safety Agency — EASA	5	3			2
4	European Agency for the Management of Operational Cooperation at the External Borders — Frontex	10	4	6
5	European Police Office — Europol	14	10	1		3
6	European Food Safety Authority — EFSA	6	3	1		2
7	European Maritime Safety Agency — EMSA	6	3	2		1
8	European Centre for Disease Prevention and Control — ECDC	3		1		2
9	Translation Centre for the Bodies of the EU — CdT	2		2
10	European Environment Agency — EEA	1		1
11	European Body for the Enhancement of Judicial Cooperation — Eurojust	4	2	1		1
12	European Chemicals Agency — ECHA	4	2			2
13	European Railway Agency — ERA	6	3	3
14	European Union Agency for Fundamental Rights — FRA	3	2			1
15	European Banking Authority — EBA	7	5	1		1
16	European fFoundation for the Improvement of Living and Working Conditions — Eurofound	0
17	European Training Foundation — ETF	1				1
18	European Securities and Markets Authority — ESMA	13	4	6	0	3
19	European Centre for the Development of Vocational Training — Cedefop	5	4			1
20	European Insurance and Occupational Pensions Authority — EIOPA	6	4		1	1
21	European Monitoring Centre for Drugs and Drug Addiction — EMCDDA	6	2	4	0
22	European Agency for Safety and Health at Work — EU-OSHA	4	3	1
23	Community Plant Variety Office — CPVO	3	1	2
24	European GNSS Agency — GSA	3	2			1
25	European Fisheries Control Agency — EFCA	3	2			1
26	European Institute for Gender Equality — EIGE	4	2	2
27	European Police College — CEPOL	10	2	4	1	3
28	European Union Agency for Network and Information Security — ENISA	2	1	1
29	Agency for the Cooperation of Energy Regulators — ACER	7	5	2
30	European Asylum Support Office — EASO	12	2	1	1	8
31	Office of the Body of European Regulators for Electronic Communications — BEREC	14	11	3
32	European Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice — eu-LISA (1)
	Executive Agencies
33	Education, Audovisual and Culture Executive Agency — EACEA	1				1
34	Research Executive Agency — REA	2	1			1
35	European Research Council Executive Agency — ERCEA	0
36	Executive Agency for Competitiveness and Innovation — EACI	2	2
37	Trans-European Transport Network Executive Agency — TEN-T EA	1				1
38	Executive Agency for Health and Consumers — EAHC	3				3
	Other Bodies
39	European Institute of Innovation and Technology — EIT	3	2	1
40	Euratom Supply Agency — EURATOM	2	1		1
41	Europol Pension Fund — EPF	1			1
Totals		192	94	47	5	46

(1) Agency first audited in 2013 therefore no 2012 comments to refer to.

10.12.2014

Official Journal of the European Union

C 442/18

REPORT

on the annual accounts of the Agency for Cooperation of Energy Regulators for the financial year 2013, together with the Agency’s replies

(2014/C 442/02)

INTRODUCTION

The Agency for Cooperation of Energy Regulators (hereinafter ‘the Agency’, aka ‘ACER’), which is located in Ljubljana, was created by Regulation (EC) No 713/2009 of the European Parliament and of the Council (1). The Agency’s main task is to assist National Regulatory Authorities in exercising, at Union level, the regulatory tasks that they perform in the Member States and, where necessary, to coordinate their action. Under the REMIT regulation (2), the Agency was given new additional responsibilities, together with national regulatory authorities, regarding the monitoring of the European wholesale energy market (3).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of key controls of the Agency’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

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Agency, which comprise the financial statements (4) and the reports on the implementation of the budget (5) for the financial year ended 31 December 2013; and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Agency and the legality and regularity of the underlying transactions (6):

(a)

The management’s responsibilities in respect of the Agency’s annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (7); making accounting estimates that are reasonable in the circumstances. The Director approves the annual accounts of the Agency after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the Agency in all material respects.

(b)

The management’s responsibilities in respect of the legality and regularity of the underlying transactions and compliance with the principle of sound financial management consist of designing, implementing and maintaining an effective and efficient internal control system comprising adequate supervision and appropriate measures to prevent irregularities and fraud and, if necessary, legal proceedings to recover funds wrongly paid or used.

The auditor’s responsibility

The Court’s responsibility is, on the basis of its audit, to provide the European Parliament and the Council (8) 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 Agency are free from material misstatement and the transactions underlying them are legal and regular.

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.

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

In the Court’s opinion, the Agency’s annual accounts present fairly, in all material respects, its financial position as at 31 December 2013 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

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 are legal and regular in all material respects.

10.	The comments which follow do not call the Court’s opinions into question.

COMMENTS ON BUDGETARY MANAGEMENT

11.

The Agency carried over 1,9 million euro or 56 % of total committed title II appropriations (Agency’s building and associated costs), mainly related to the implementation of the REMIT regulation. This is an operational, multiannual activity and should have been budgeted under title III, a shortcoming which was rectified in subsequent commitment appropriations.

12.

In addition, the Agency carried over 3,1 million euro or 91 % of total committed title III appropriations, also related to the implementation of the REMIT regulation. The exceptionally high rate of carry-over for title III is mainly due to some 3 million euro in additional funding received through an amended budget approved on 31 October 2013.

OTHER COMMENTS

13.

The Agency held 5,5 million euro in cash at year-end, which included some 3 million euro relating to the late budget amendment (see paragraph 12). Nevertheless, average cash balances during the year were significantly higher than justified by operational requirements.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

14.

An overview of the corrective actions taken in response to the Court’s comments from previous years is provided in Annex I.

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 211, 14.8.2009, p. 1.

(2) Regulation (EU) No 1227/2011 of the European Parliament and of the Council (OJ L 326, 8.12.2011, p. 1) which assigns an important role to the Agency in supervising trading in wholesale energy markets across Europe.

(3) Annex II summarises the Agency’s competences and activities. It is presented for information purposes.

(4) 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.

(5) These comprise the budgetary outturn account and the annex to the budgetary outturn account.

(6) Articles 39 and 50 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).

(7) 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.

(8) Article 107 of Regulation (EU) No 1271/2013.

ANNEX I

Follow-up of previous years’ comments

Year	Court's comment	Status of corrective action (Completed/Ongoing/Outstanding/N/A)
2011	The high level of appropriations not used and of carry-overs as well as the low level of payments indicate shortcomings in budget planning and implementation and are at odds with the budgetary principle of annuality.	Completed
2011	There is room to improve the transparency of recruitment procedures. As an example, vacancy notices did not specify the maximum number of candidates to be put on a reserve list and made no reference to the possibility of appeal. Moreover the questions for written tests and interviews and their weightings were not prepared before the examination of the applications.	Completed
2012	In order to cover higher school fees, the Agency grants staff whose children attend primary or secondary school a top up allowance in addition to the education allowances provided for in the Staff Regulations (1). Total 2012 top up allowances amounted to some 23 000 euro. They are not covered by the Staff Regulations and are therefore irregular.	Completed
2012	The Agency carried over committed appropriations under title II (Agency’s building and associated costs) of its budget amounting to 1,7 million euro, representing 81 % of total committed title II appropriations. These carry-overs mainly relate to the implementation of the REMIT regulation which is ongoing. Since the implementation is linked to the Agency’s operational activities, it should normally have been budgeted under title III.	Completed
2012	In 2012, the Agency made 20 budget transfers of some 1 million euro and affecting 43 budget lines. This indicates weaknesses in budget planning.	Completed
2012	The Agency held 4,2 million euro in cash at the year end, including the 2011 budget surplus of 1,6 million euro which resulted from an excessive call for funds in 2011 and was recovered by the Commission in January 2013. This is not consistent with a rigorous treasury management.	Ongoing
2012	The audited recruitment procedures revealed shortcomings affecting transparency and an equal treatment of candidates: questions for interviews and tests were not set before the examination of the applications. The conditions for admission to written tests and interviews and for being included in the list of suitable candidates were not specified in sufficient detail and the measures taken to ensure the anonymity of candidates sitting written tests were inadequate.	Ongoing

(1) Article 3 of Annex VII provides for twice the basic allowance of 252,81 euro = 505,62 euro.

ANNEX II

Agency for the Cooperation of Energy Regulators (Ljubljana)

Competences and activities

Areas of Union competence deriving from the Treaty

(Article 114 (ex Article 95 TEC) and Article 194 of the Treaty on the Functioning of the European Union)

The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.

In the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment, Union policy on energy shall aim, in a spirit of solidarity between Member States to:

(a)	ensure the functioning of the energy market;

(b)	ensure security of energy supply in the Union;

(c)	promote energy efficiency and energy saving and the development of new and renewable forms of energy; and

(d)	promote the interconnection of energy networks.

The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall establish the measures necessary to achieve these objectives. Such measures shall be adopted after consultation of the Economic and Social Committee and the Committee of the Regions.

Competences of the Agency

(As specified in Regulation (EC) No 713/2009 of the European Parliament and of the Council; Commission Regulation (EU) No 838/2010; Regulation (EU) No 1227/2011 of the European Parliament and of the Council)

Objectives

The purpose of the Agency is to assist National Regulatory Authorities in exercising, at Union level, the regulatory tasks that they perform in the Member States and, where necessary, to coordinate their action.

Tasks

—	To complement and coordinate the work of National Regulatory Authorities,

—	to participate in the creation of European network rules,

—	to take, under certain conditions, binding individual decisions on terms and conditions for access and operational security for cross-border infrastructure,

—	to give advice on various energy-related issues to the European institutions,

—	to monitor and report developments on the energy markets,

—	to formulate a proposal to the Commission on the annual cross-border infrastructure compensation sum for the ITC mechanism,

—	to cooperate with the national regulatory authorities, ESMA, competent financial authorities of the Member States and where appropriate with national competition authorities to monitor the wholesale energy markets,

—	to assess the operation and transparency of different categories of market places and ways of trading,

—	to make recommendations to the Commission as regards market rules, records of transactions, orders to trade, standards and procedures which could improve market integrity and the functioning of the internal market,

—	to assist the NRAs in assessing the consistent application of the Projects of Common Interests (PCIs) identification criteria/Cost-Benefit Analysis (CBA) methodology, in evaluating their cross border relevance within a region and in presenting such an assessment to the Regional Groups,

—	to provide an opinion on the draft regional lists of the electricity and gas PCIs and on the consistent application of the criteria and the cost-benefit analysis across regions,

—	to provide an opinion to the Commission and the Member States on the methodologies for a harmonised energy system-wide CBA at Union-wide level proposed by the ENTSOs,

—	to monitor the implementation of PCIs,

—	to facilitate the sharing of good practices and provide recommendations on incentives and common methodology to evaluate the incurred higher risks of investments in electricity and gas transmission.

Governance

Administrative Board

Composition

Two members appointed by the European Parliament, two members appointed by the Commission and five members appointed by the Council. Each member has an alternate.

Tasks

The Administrative Board adopts the Agency’s work programme and the budget. It ensures that the Agency carries out its mission and performs the tasks assigned to it in accordance with the Agency Regulation.

Director

Appointed by the Administrative Board after a favourable opinion from the Board of Regulators and on the basis of a list of candidates proposed by the Commission.

Board of Regulators

Composition

A senior representative of the regulatory authorities from each Member State and one non-voting representative of the Commission. Each member has an alternate, nominated by the national regulatory authority from each Member State.

Tasks

—	the Board provides opinions to the Director on the opinions, recommendations and decisions that are considered for adoption,

—	provides guidance to the Director in the execution of its tasks,

—	delivers an opinion to the Administrative Board on the candidate to be appointed as Director, and

—	approves the work programme of the Agency.

External audit

European Court of Auditors.

Discharge authority

European Parliament acting on a recommendation from the Council.

Resources made available to the Agency in 2013 (2012)

Budget 2013 (2012)

11,9(7,2) million euro

Staff as at 31 December 2013(2012)

Posts listed in the establishment plan: 49 (43)

Posts occupied on 31 December: 49 (42)

Other staff: 20 (14)

Total staff: 69 (57), of which assigned to:

—	operational tasks: 41 (34)

—	administrative tasks: 28 (23)

Products and services 2013

—	One Framework Guideline (Gas: FG on rules regarding harmonised transmission tariff structures). Public consultations organised as required under Article 10 of Regulation (EC) No 713/2009, including workshop.

—

Network codes

(a)

Seven Reasoned Opinions on Network Codes (Electricity: Network Code on Forward Capacity Allocation, Network Code on System Operations, Network Code on Operational Planning and Scheduling, Network Code on Load Frequency Control and Reserve, Network Code on Demand Connection; Gas: Network Code on Balancing and Network Code on Interoperability and Data Exchange).

(b)

Four Qualified Recommendations on Network Codes (all in Electricity: Network Code for Requirements for Grid Connection Applicable to all Generators, Network Code on Capacity Allocation and Congestion Management, Network Code on Operational Security and Network Code on Operational Planning and Scheduling).

(c)	Three Recommendations (Electricity: Network Code on Demand Connection, Network Code on Load Frequency Control and Reserves; Gas: Network Code on Gas Balancing of Transmission Networks).

—	Opinion on ENTSO-E Work Programme for 2013.

—	Opinion on ENTSO-E Work Programme for 2014.

—	Opinion on Capacity Market for the ITRE Committee of the European Parliament.

—	Opinion on the ENTSO-E Winter Outlook Report 2012/2013 and Summer Review 2012.

—	Opinion on whether long run average incremental costs are suitable for the assessment of infrastructure costs to be used in the inter-transmission system operator (TSO) compensation mechanism.

—	Opinion on the ENTSO-E R&D Roadmap 2013-2022 and implementation Plan 2014-2016.

—	Opinion on ENTSO-E Annual Report 2012.

—	Opinion on ENTSO-E Summer Outlook Report 2013 and Winter Review 2012/2013.

—	Opinion on the ENTSO-E Manual of Procedures (Transparency Platform).

—	Opinion on ENTSOG 2011 Annual Report.

—	Opinion on ENTSOG 2013 Work Programme.

—	Opinion on 2012/2013 Gas Winter Supply Outlook.

—	Opinion on Gas Regional Investment Plans (GRIPS) 2011(12) — 2020(21).

—	Opinion on Gas Summer Supply Outlook.

—	Opinion on ENTSOG 2012 Annual Report.

—	Opinion on Gas TYNDP 2013-2022.

—	Opinion on the format, defined by ENTSOG, which can be used to download data from the transparency platform (Regulation (EC) No 715/2009, Annex I, 3.1.1(1)(e)).

—	Opinion on ENTSOG 2014 Work Programme.

—	Opinion on the consistent application of the criteria and the CBA methodology for submitted projects across regions and evaluation of their European added value.

—	Guidance on Development of Network Code amendment proposal on Incremental and New Capacity (Gas).

—	Update of the 2nd edition of the Guidance on the REMIT application, 3rd edition of the guidance on the application of REMIT definitions, and update of Q&A paper.

—	Recommendation on New Regulatory Framework for Inter-TSO Compensation.

—	Recommendation to the European Commission on the Records of Transactions (balancing market contracts and transportation contracts).

—	Recommendation regarding Cross-border Cost Allocation Requests submitted in the framework of the first Union list of electricity and gas projects of common interest.

—	Annual Report on REMIT activities.

—	ITC monitoring report 2012.

—	Report on Capacity Remuneration Mechanisms and the Internal Electricity Market.

—	Report on ENTSO-E and ENTSOG implementation of the tasks in Article 8(1), (2) and (3) of Regulation (EC) No 714/2009 and Article 8(1), (2) and (3) of Regulation (EC) No 715/2009 respectively.

—	High-Level Conclusions of an Internal Workshop (with concerned NRAs) on Loop flows.

—	A Joint ACER-CEER Market Monitoring Report (Article 11 of Regulation (EC) No 713/2009) was issued on 28 November; a presentation took place in Brussels.

—	The Regional Initiatives Status Review for 2012 was published in February.

—	Four On-line Gas Regional Initiatives (GRIs) and Four On-line Electricity Regional Initiatives (ERIs) quarterly reports were published.

—	On 17 May the Agency organised its Annual Conference ‘Energy Markets: 2014 and beyond’; 200 participants attended.

Source: Annex provided by the Agency.

THE AGENCY’S REPLIES

11.	As noted by the Court the identified shortcoming was already rectified by the Agency through subsequent commitments related to the implementation of REMIT being raised on the operational budget lines within title III.

12.

As already acknowledged by the Auditors, the high rate of carry-overs reflected the delay in the implementation of REMIT. This delay was due to the fact that the transfer of the required additional funds from DG ENER was approved only in October 2013 and the funds received by the Agency in early November 2013. However, the Agency has successfully managed to conclude all planned procurement procedures related to the REMIT implementation by December 2013, with the related expenditure to occur in 2014.

13.

The account balance at year end included the 3 million euro received late in the year, as a result of a budgetary adjustment, with the difference being held to cover all legal obligations, mainly REMIT related, for which commitments were entered towards the end of 2013. The cash forecasting tool introduced in 2014 will support a better cash management in the future.

10.12.2014

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

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

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

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Centre, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013; and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Centre and the legality and regularity of the underlying transactions (5):

(a)

The management’s responsibilities in respect of the Centre's annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (6); making accounting estimates that are reasonable in the circumstances. The Director approves the annual accounts of the Centre after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the Centre in all material respects.

(b)

The auditor’s responsibility

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 Centre are free from material misstatement and the transactions underlying them are legal and regular.

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

In the Court’s opinion, the Centre’s annual accounts present fairly, in all material respects, its financial position as at 31 December 2013 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

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 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.

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.

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:

—	European Environment Agency,

—	European Training Foundation,

—	European Monitoring Centre for Drugs and Drug Addiction,

—	European Medicines Agency,

—	European Agency for Safety and Health at Work,

—	Office for Harmonisation in the Internal Market (Trademarks and Designs),

—	European Police Office (Europol) and Europol Drugs Unit.

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

—	To make arrangements for cooperation with the bodies and institutions,

—	to participate in the work of the Interinstitutional Translation Committee.

Governance

Management Board

Composition

—	one representative per Member State,

—	two representatives from the Commission,

—	one representative from each body or institution calling upon the Centre’s services.

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.

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)

Products and services 2013 (2012)

Number of pages translated:

8 04 986(7 35 007)

Number of pages by languages:

—	official languages: 8 00 221(7 22 505)

—	other languages: 4 765(12 502)

Number of pages per client:

—	bodies: 7 80 310(7 07 888)

—	institutions: 24 676(27 119)

Number of pages translated by freelances:

5 12 524(4 80 695)

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.

10.12.2014

Official Journal of the European Union

C 442/42

REPORT

on the annual accounts of the European Centre for the Development of Vocational Training for the financial year 2013, together with the Centre’s reply

(2014/C 442/05)

INTRODUCTION

The European Centre for the Development of Vocational Training (hereinafter ‘the Centre’, aka ’Cedefop’), which is located in Thessaloniki, was established by Council Regulation (EEC) No 337/75 (1). Its core mandate is to serve the development of vocational training at Union level. In order to achieve this objective, it has the task of compiling and disseminating documentation on vocational training systems (2).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Centre, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013, and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Centre and the legality and regularity of the underlying transactions (5):

(a)

(b)

The auditor’s responsibility

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

Opinion on the legality and regularity of the transactions underlying the accounts

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 are legal and regular in all material respects.

10.	The comments which follow do not call the Court’s opinions into question.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

11.

An overview of the corrective actions taken in response to the Court's comments from previous years is provided in Annex I.

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 39, 13.2.1975, p. 1.

(2) Annex II summarises the Centre's competences and activities. It is presented for information purposes.

(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).

(7) Article 107 of Regulation (EU) No 1271/2013.

ANNEX I

Follow-up of previous years’ comments

Year	Court's comment	Status of corrective action (Completed/Ongoing/Outstanding/N/A)
2011	The excessive level of carry-overs for title II is at odds with the budgetary principle of annuality.	Completed
2011	A significant number of budgetary transfers was made which were mostly concentrated at the year-end (1). The justification for these budgetary transfers was insufficient, as no estimate of needs was made. This situation indicates weaknesses in budget planning and programming and is at odds with the principle of specification.	Completed
2012	The Centre awards grants on an annual basis to a network of national partners (2) (grants per agreement range between 23 615 euro and 43 620 euro). Grant expenditure (which mainly relates to beneficiaries’ staff costs) in 2012 amounted to 6 95 337 euro (3), or 4 % of total operating expenditure. The Centre’s ex ante verifications of grants consist of a comprehensive desk-analysis of cost claims submitted by grant beneficiaries, as well as a review of certificates obtained from external auditors which were contracted by the beneficiaries or of certificates from independent public officers. However, the Centre does not usually verify the staff costs claimed by beneficiaries on the basis of original supporting documentation. Related ex post verifications were last carried out in 2009. As a result, ex ante verifications provide only limited assurance.	Completed
2012	Budget implementation rates were high at 100 % for titles I and III and 98 % for title II. While carry-overs of committed appropriations were high for title II at 39 % (6 73 392 euro), this mainly resulted from reasons beyond the Centre’s control, such as delays in the repair works carried out by the Greek authorities on the Centre’s premises. These led to a postponement of the related maintenance, repair and fitting-out of premises (some 1 24 000 euro), as well as delays in procuring equipment for the Centre’s conference rooms (some 2 42 000 euro). Part of the carry-overs is attributable to delays in procuring IT equipment (some 1 72 000 euro).	N/A
2012	Two recruitment procedures for the post of the Centre’s future Director had been launched in 2010 and 2011 and both of them were declared unsuccessful (4). A third recruitment procedure was launched at the end of 2012 and is still ongoing. The Court found that in the first two recruitment procedures members of the Pre-selection Committee did not sign a declaration of absence of conflict of interests and that questions for interviews and their weightings, as well as the threshold scores for being included in the list of suitable candidates were set after the screening of candidates.	Completed

(1) In total, 77 budget transfers were made, totalling 1,5 million euro, of which 67 transfers (1,3 million euro) were made in November and December 2011.

(2) National agencies and research institutes mainly.

(3) Resulting from final payments and clearings of pre-financings related to grant agreements from previous years. For 2012 grant agreements, only pre-financings were made in 2012 which had not yet led to expenditure.

(4) In the first recruitment procedure, none of the candidates shortlisted by the Centre’s Governing Board was appointed by the European Commission. In the second recruitment procedure, the Pre-selection Committee considered that none of the proposed candidates met the requirements for being shortlisted and did not submit a list of suitable candidates to the Governing Board.

ANNEX II

European Centre for the Development of Vocational Training (Thessaloniki)

Competences and activities

Areas of Union competence deriving from the Treaty

(Article 166(1) of the Treaty on the Functioning of the European Union)

Collection of information

The Union shall implement a vocational training policy which shall support and supplement the action of the Member States, while fully respecting the responsibility of the Member States for the content and organisation of vocational training.

Competences of CEDEFOP

(Articles 2 and 3 of Regulation (EEC) No 337/75)

Objectives

In its capacity as the European Union reference centre for vocational education and training, Cedefop provides policy-makers, researchers and professionals with evidence on current trends to enable them to reach soundly based decisions and actions. Cedefop assists the European Commission in promoting and developing vocational education and training at Union level.

Tasks

—	To compile selected documentation and produce data analysis,

—	to contribute to research development and coordination,

—	to utilise and disseminate relevant information,

—	to encourage and support a concerted approach to matters relating to the development of vocational training,

—	to provide a forum for a broad and diverse public.

Governance

Governing Board

Composition

For each Member State:

(a)	One member representing the Government.

(b)	One member representing the employers’ organisations.

(c)	One member representing the employees’ organisations.

For the European Commission: three members.

The members referred to in (a), (b) and (c) are appointed by the Council. The Commission appoints the members who are to represent it.

Coordinators from the Employers’ and Employees’ organisations at European level and observers from the EEA countries also attend Governing Board and Bureau meetings.

Duties

To adopt the budget, medium term priorities (Cedefop’s multiannual planning) and the work programme and to assess and analyse the annual activity report and the annual accounts. To adopt the final budget and the establishment plan.

Bureau

Composition

The chairman and the three vice-chairmen of the Governing Board, one coordinator per group and one additional representative of the Commission.

Director

Appointed by the Commission from a list of candidates submitted by the Governing Board; he/she is responsible for the management of Cedefop and implements the decisions of the Governing Board and the Bureau.

Internal audit

European Commission’s Internal Audit Service (IAS).

External audit

European Court of Auditors.

Discharge authority

European Parliament, acting on a recommendation from the Council.

Resources made available to the Centre in 2013 (2012)

Final Budget

18,53(19,22) million euro

Union contribution (1): 97,4 % (97,6 %)

Staff as at 31 December 2013

Number of posts in establishment plan: 100 (101)

Posts occupied: 98 (2) (98)

Other staff:

—	contract staff: 23 (23)

—	seconded national experts: 4 (3)

Total staff: 125 (124)

—	operational staff: 91 (90)

—	administrative: 34 (34)

Products and services in 2013 (2012)

Policy analysis and reporting

Cedefop monitors countries’ progress towards the short-term deliverables agreed in the Bruges Communiqué. Country fiches summarising policy progress were finalised for all EU Member States, Norway and Iceland and were made available to the European Commission, which proposes country specific recommendations for the European semester. To prepare for Cedefop’s 2014 VET policy monitoring report, focus groups with members of the Advisory Committee on Vocational Training (ACVT) discussed the effectiveness of policies. Descriptions of national VET systems prepared by ReferNet partners were published online for 29 countries. Spotlight on VET in Ireland was prepared for the March meeting of the DGVTs. Vocational education and training in Lithuania — Short description and Spotlight on VET in Lithuania were released for the DGVTs’ meeting in November and the Presidency Conference on VET. Cedefop’s On the way to 2020: data for vocational education and training was published.

Common European tools, qualifications and learning outcomes

Cedefop provided policy advice and expertise to EU-level working groups to support the implementation of EU tools. Cedefop’s study on qualifications at EQF level 5 and its Analysis and overview of NQF level descriptors in European countries contributed directly to EQF/NQF implementation. Cedefop’s study The role of qualifications in governing professions and occupations was published. A briefing note on ECVET opportunities and challenges was released. Europass registered 20,85 million visits (14,8 million) and 10,16 million (8,3 million) CVs generated online. A working dinner with the European Parliament discussed achievements and challenges in relation to European tools. Cedefop’s study Renewing VET provision: Understanding feedback mechanisms between initial VET and the labour market was published. The briefing note Keeping young people in (vocational) education: what works? was drafted for the Lithuanian Presidency Conference on VET.

Adult learning and transitions

Cedefop’s study Return to Work — work-based learning and the reintegration of unemployed adults into the labour market was debated at the VET conference of the Lithuanian Presidency. Cedefop’s studies Benefits of vocational education and training in Europe for people, organisations and countries and Labour market outcomes of vocational education in Europe were published. Cedefop’s study on Validation of non-formal and informal learning in European enterprises was finalised and a synthesis disseminated at the Cedefop/DG EAC joint seminar marking the start of the follow-up to the 2012 Council Recommendation on validation. To support the European alliance for apprenticeship, Cedefop organised a high-level conference on ‘Renewing vocational education and training to tackle skill mismatch — work-based learning and apprenticeship for all?’.

Skills analysis

Cedefop supported the development of the EU Skills Panorama (EUSP) for which it will take full responsibility as of 2014. Cedefop’s 2013 projections for skill supply and demand in the European Union were released. Roads to recovery: three skill and labour market scenarios for 2025 summarised the key findings. Cedefop’s research paper Quantifying skill needs in Europe — Occupational skills profiles: methodology and application was published. A briefing note and publication Skills for a low carbon Europe were released. Cedefop’s data and analyses on skill mismatch contributed to the work of the Global Agenda Council (GAC) on Employment of the World Economic Forum (WEF) and were presented at the Summit on the Global Agenda 2013 in Abu Dhabi.

Organisational impact

The (external) evaluation of Cedefop for the 2007–2012 period examined whether its work was consistent with European policies and looked at its efficiency and impact and its synergies with four other EU agencies. It highlighted that: Cedefop was highly successful in implementing the objectives in its Founding Regulation and is recognised as a leading centre of expertise worldwide on qualifications frameworks and skills; Cedefop’s work did not duplicate the activities of any other actors at European, national or international level; the popularity of its outputs and downloads had increased significantly; its events were of high quality and participant satisfaction very high; operations were cost-effective. Cedefop uses a performance measurement system (PMS) to help manage and evaluate its impact, efficiency and effectiveness. 173 EU-level policy documents (169) cited Cedefop’s findings. Cedefop’s administration continued to support operations in an effective and efficient way. A staff survey in 2013 confirmed the staff’s satisfaction with administrative and support services.

For more information see www.cedefop.europa.eu (Annual Report and Annual Activity Report 2013).

(1) Note: included are the assigned revenues from the DG EMPL Delegation Agreements amounting to 0,6 million euro in 2013 (1,32 million euro in 2012).

(2) This includes posts actually filled (96) and job offers made (2) for vacant posts (in line with the Multiannual Staff Policy Plan approach).

Source: Annex supplied by the Centre.

CENTRE’S REPLY

Cedefop has taken note of the Court's report.

10.12.2014

Official Journal of the European Union

C 442/51

REPORT

on the annual accounts of the European Police College for the financial year 2013, together with the College’s replies

(2014/C 442/06)

INTRODUCTION

The European Police College (hereinafter ‘the College’, aka ‘CEPOL’), which is located in Bramshill, was established by Council Decision 2000/820/JHA (1), repealed and replaced in 2005 by Council Decision 2005/681/JHA (2). The College’s task is to function as a network and bring together the national police training institutes in the Member States to provide training sessions, based on common standards, for senior police officers (3).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of key controls of the College’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

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the College, which comprise the financial statements (4) and the reports on the implementation of the budget (5) for the financial year ended 31 December 2013; and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the College and the legality and regularity of the underlying transactions (6):

(a)

The management’s responsibilities in respect of the College's annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (7); making accounting estimates that are reasonable in the circumstances. The Director approves the annual accounts of the College after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the College in all material respects.

(b)

The auditor’s responsibility

The Court’s responsibility is, on the basis of its audit, to provide the European Parliament and the Council (8) 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 College are free from material misstatement and the transactions underlying them are legal and regular.

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

In the Court’s opinion, the College’s annual accounts present fairly, in all material respects, its financial position as at 31 December 2013 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

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 are legal and regular in all material respects.

10.	The comments which follow do not call the Court’s opinions into question.

COMMENTS ON BUDGETARY MANAGEMENT

11.

Out of the committed appropriations carried over from 2012 amounting to EUR 1,7 million, EUR 0,3 million (17,6 %) were cancelled in 2013. This was mainly due to lower than estimated costs to be reimbursed under 2012 grant agreements (EUR 0,21 million or 70 % of cancelled carry-overs), which indicates the need to obtain more accurate information from beneficiaries at year-end on the actual cost incurred.

12.

The level of committed 2013 appropriations for the different titles varied between 92 % and 95 %, indicating that legal commitments were made in a timely manner. The level of committed appropriations carried over to 2014 was high for Title II (administrative expenditure) at EUR 1 45 410 (30,5 %), but this mainly arose from events beyond the College’s control, such as payments due in 2014 for services and goods ordered and received as planned in 2013.

OTHER COMMENTS

13.

The College’s recruitment procedures are still not fully transparent. Guidance to members of the selection boards on the consistent assessment of selection criteria was not sufficiently clear; requirements set in respect of professional experience were not always compliant with the Implementing Rules to the College’s Staff Regulations and recruitment documentation was incomplete.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

14.

An overview of the corrective actions taken in response to the Court's comments from previous years is provided in Annex I.

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 1 July 2014.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

(1) OJ L 336, 30.12.2000, p. 1.

(2) OJ L 256, 1.10.2005, p. 63.

(3) Annex II summarises the College’s competences and activities. It is presented for information purposes.

(5) These comprise the budgetary outturn account and the annex to the budgetary outturn account.

(6) Articles 39 and 50 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).

(8) Article 107 of Regulation (EU) No 1271/2013.

ANNEX I

Follow-up of previous years’ comments

Year	Court's comment	Status of corrective action (Completed/Ongoing/Outstanding/N/A)
2011	The high level of carry-overs as well as the high level of cancellations indicate shortcomings in budget planning and/or implementation and are at odds with the budgetary principle of annuality.	Not applicable
2011	The high level of budget transfers indicates weaknesses in budget planning and is at odds with the principle of specification.	Ongoing
2011	The College is located in Bramshill, using premises of the UK National Policing Improvement Agency (NPIA). NPIA is due to close at the end of 2012 and it is not clear until when the College can continue using its current premises.	Ongoing
2011	The College needs to improve the transparency of recruitment procedures. Vacancy notices made no reference to the possibility of appeal; weightings for selection criteria were not set before the examination of applications and reports summarising screening procedures and decisions on reserve lists were not always prepared.	Completed
2012	The College has carried over to 2013 committed appropriations amounting to EUR 3 55 500 for the 2013 exchange programme, which is scheduled to take place between March and November 2013. In the absence of any reference to the 2013 exchange programme in the College’s 2012 annual work programme and in view of the fact that no financing decision had been made on the matter in 2012, the carry-over is irregular.	Not applicable
2012	Out of the committed appropriations carried over from 2011 amounting to EUR 1,7 million, EUR 0,7 million (41,2 %) were cancelled in 2012. This was mainly due to lower than estimated costs to be reimbursed under 2011 grant agreements (EUR 0,44 million or 62 % of cancelled carry-overs).	Outstanding
2012	The level of committed 2012 appropriations for the different titles varied between 90 % and 99 % of total appropriations, indicating that legal commitments were made in a timely manner. The level of committed appropriations carried over to 2013 was high for Title III (operating expenditure) as it amounted to EUR 1,5 million (36 %). This however was not due to delays in implementing the College’s 2012 annual work programme, but mainly arose from the carry-over referred to in paragraph 11 and from the fact that costs relating to courses that were organised in the last months of 2012 under 2012 grant agreements were not due for reimbursement until the beginning of 2013 (EUR 1 million).	Not applicable
2012	In 2012, the College made 37 budgetary transfers amounting to EUR 1 million, out of which 36 within their respective titles.	Ongoing
2012	Discussions about the College's future that have been ongoing for several years have created a situation of uncertainty which continues to hamper business planning and implementation.	Ongoing
2012	The College needs to ensure full compliance with the ‘Guide to CEPOL recruitment’ and to improve further the transparency of recruitment procedures: vacancy notices were not always published at least 6 weeks before applications were due; there was no evidence that assessors checked that the rules for the submission of applications had been respected; the selection criteria that were applied did not always match those that had been specified in the vacancy notices; there were major delays in some cases in the examination of applications.	Completed

ANNEX II

European Police College (Bramshill)

Competences and activities

Areas of Union competence deriving from the Treaty

(Article 87 TFEU)

Approximation of laws

‘1.	The Union shall establish police cooperation involving all the Member States’ competent authorities, including police, customs and other specialised law enforcement services in relation to the prevention, detection and investigation of criminal offences.

For the purposes of paragraph 1, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may establish measures concerning:

[...]

(b)	support for the training of staff, and cooperation on the exchange of staff, on equipment and on research into crime-detection;’ [...].

Competences of the College

(Council Decision 2005/681/JHA)

Objectives

‘The aim of CEPOL shall be to help train the senior police officers of the Member States by optimising cooperation between CEPOL’s various components. It shall support and develop a European approach to the main problems facing Member States in the fight against crime, crime prevention and the maintenance of law and order and public security, in particular the cross-border dimensions of those problems.’

Tasks

—	To increase knowledge of the national police systems and structures of other Member States and of cross-border police cooperation within the European Union.

—

To improve knowledge of international and European Union instruments, particularly in the following sectors:

(a)	the institutions of the European Union, their functioning and role, as well as the decision-making mechanisms and legal instruments of the European Union, in particular as regards their implications for law-enforcement cooperation;

(b)	Europol’s objectives, structure and functioning, as well as ways to maximise cooperation between Europol and relevant law-enforcement services in the Member States in the fight against organised crime;

(c)	Eurojust’s objectives, structure and functioning.

—	To provide appropriate training with regard to respect for democratic safeguards, with particular reference to the rights of defence.

Governance

Governing Board

Composition

One delegation from each Member State.

Each delegation shall have one vote. Representatives of the European Commission and of the General Secretariat of the Council of the European Union and Europol shall be invited to attend meetings as non-voting observers.

Director

Manages the College, is appointed and removed by the Governing Board.

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.

Resources made available to the College in 2013 (2012)

Budget

8,4(8,4) million euro

Staff

The Establishment Plan for 2013 provided for 28 (28) Temporary Staff.

In addition: 10 (10) Contract Staff posts were budgeted for.

Member States also seconded a total of: five (five) National Experts during the course of the year.

Products and services in 2013 (2012)

Courses, Seminars and Conferences

The College implemented a total of 72 (82) residential activities (courses, seminars and conferences). The assessment of the evaluation of the activities shows that general satisfaction with the College activities and its learning outcomes remained outstanding at 94 % (93 %).

CEPOL has brought together highest number of participants in its history: 2 251(2 098) law enforcement participants and 707 (772) trainers from 42 (33) countries (EU Member States and Third Countries) and 21 (27) EU and international bodies.

Attendance rate (attendance v seats available) has considerably increased reaching the highest ever rate of 116 % (96 %) demonstrating increasing demand for CEPOL training. The College itself organised 19 (15) activities in support of the network and initiated a Grant Agreement application process for 2014. No activities were postponed to the next calendar year.

External Relations

In 2013 CEPOL continued its fruitful cooperation with candidate, potential candidate and ENP/EaP countries as well as Strategic Partners, JHA agencies and EU institutions, including the European External Action Service.

In 2013 CEPOL signed two working arrangements with Albania and the Russian Federation (significantly, in 2013 for the first time a joint RF-CEPOL activity took place in Moscow) as well as one with EU-LISA. Negotiations were further pursued with the Former Yugoslav Republic of Macedonia and with Bosnia and Herzegovina, while formal contacts were initiated with Kosovo and Armenia, leading to two expert missions there to explore cooperation opportunities.

Contacts were also initiated with law enforcement training actors in the United States. CEPOL successfully concluded its chairmanship of the Contact Group of Justice and Home Affairs agencies carrying out agreed common activities included in a final report validated by the COSI.

In 2013 CEPOL supported seven capacity-building projects implemented by EU Member States; those ranged from e-Learning methodologies through training against Child Sexual Exploitation to civilian crisis management and other important policing topics.

Development of Training Manuals and (Common) Curricula

The SIRENE Trainers Manual was used in the context of SIRENE activities in 2013 and updated by the SIRENE Training Committee. It will be distributed to the General Secretariat of the Council of the European Union at the beginning of 2014.

The Common Curriculum on Drug Trafficking was updated and two new Common Curricula were developed: Counter-Terrorism and Eurojust, the latter with the strong involvement of Eurojust experts. A Europol expert contributed to the Common Curriculum on Counter-Terrorism and Europol also provided comments to the Common Curriculum on Drug Trafficking (four Common Curricula updated and one completed in 2012).

Research and Science

The Annual CEPOL European Police Research and Science Conference 2013 with the title ‘Policing civil societies in times of economic constraints’ attracted 126 (120) participants from EU Member-States as well as from overseas and was well received. Contributions to the conference were put on CEPOL’s websites and a conference volume is in preparation for publication.

With the support of the CEPOL network of National Research and Science Correspondents and the Knowledge Transfer Working Group, two new issues of the ‘European Science and Research Bulletin’ were published on the website. In addition, a web page was made available collecting scientific police publications published in the area of the European Union. The CEPOL e-Library continued to be offered as a knowledge repository for registered e-Net users.

European Police Exchange Programme

CEPOL’s 2013 European Police Exchange Programme (EPEP) comprised six segments plus a Study Visit part:

—	General segment for Senior Police Officers;

—	Commanders segment;

—	Trainers segment;

—	Researchers segment;

—	Inter-agency segment;

—	ENP-WB segment;

—	Study visits to Europol (2x), Frontex, EMCDDA and OLAF.

The programme included topics deriving from the Stockholm Programme priorities, the EU Policy Cycle as well as requests from the Member States. The exchange visits are done on bilateral basis, with an implementation period of a maximum of 12 calendar days and a minimum of five working days. Study visits were organised for three-five days to the abovementioned organisations.

For the first time, Western Balkan countries, Turkey and the Eastern Partnership countries participated in EPEP.

Altogether 444 (293) participants from 25 Member States and ENP-WB countries took part — the biggest attendance ever since project inception in 2007. The programme had a budget of just over EUR 6 00 000 financed by CEPOL, and the utilisation rate was above 95 %.

The feedback collected from 135 exchangees and 54 study visit participants indicated a remarkable 98 % general satisfaction rate with the 2013 European Police Exchange Programme.

Electronic Network (e-Net)

—

A meeting for national e-Net managers took place in November. CEPOL’s LMS (Learning Management System) proved to be highly successful both in updating and improving the online support to CEPOL activities and by offering a platform for information sharing within the CEPOL network. Open Platforms have also been made available, where in a networked learning context communities of practice can learn from and with each other easily using online technology.

E-Learning

—

In 2013 the College developed three (four) new and updated two (0) existing e-Learning Modules on the subjects Money Laundering, SISII, Pruem Decision, Europol and Cybercrime. Development of the online module on the EU Policy Cycle had been completed in 2013 and was adopted in January 2014. To date 19 online modules are available.

—

In 2013 a total of 1 994(1 961) unique users visited the online learning modules, 31 webinars had been implemented and attended by 3 562(1 667) participants. Ten platforms for communities of practice were active in 2013 where 2 063 like-minded professionals in different domains of policing and police education shared and built on each other’s knowledge and expertise.

Source: Annex supplied by the College.

THE COLLEGE’S REPLIES

11 & 12:

The Agency has taken note of the Court's comments. The facts described enable us to acknowledge that the measures introduced by CEPOL in the recent years led to a significantly reduced amount of carry-overs. We are committed to further increase and maintain compliance with the budgetary principle of annuality provided in the Financial Regulation.

13:

The Agency has taken note of the Court's comments. CEPOL has completed the documentation of the human resources processes by redesigning and improving the related work instructions, templates and checklists. We expect that these further developments, to be applied for the recently launched recruitments, will contribute to a better administration and increased transparency of the recruitment process.

10.12.2014

Official Journal of the European Union

C 442/67

REPORT

on the annual accounts of the Education, Audiovisual and Culture Executive Agency for the financial year 2013 together with the Agency’s reply

(2014/C 442/08)

INTRODUCTION

The Education, Audiovisual and Culture Executive Agency (hereinafter ‘the Agency’, aka ‘EACEA’), which is located in Brussels, was established by Commission Decision No 2009/336/EC (1). The Agency’s task is to manage programmes decided by the Commission in the educational, audiovisual and cultural fields, including undertaking the detailed implementation of technical projects (2).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Agency, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013, and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Agency and the legality and regularity of the underlying transactions (5):

(a)

The management’s responsibilities in respect of the Agency's annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (6); making accounting estimates that are reasonable in the circumstances. The Director approves the annual accounts of the Agency after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the Agency in all material respects.

(b)

The auditor’s responsibility

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 Agency are free from material misstatement and the transactions underlying them are legal and regular.

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

Opinion on the legality and regularity of the transactions underlying the accounts

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 are legal and regular in all material respects.

10.	The comment which follows does not call the Court’s opinions into question.

COMMENTS ON BUDGETARY MANAGEMENT

11.

The level of committed appropriations was high at 97 % for both title I (staff expenditure) and title II (administrative expenditure). Although carry-overs of committed appropriations were relatively high for title II at 25 %, they mainly relate to IT services and equipment ordered and partly received in 2013 for which invoices had not been issued at year-end, and also to the multiannual nature of the Agency’s activities (experts’ project reviews and project audits).

FOLLOW-UP OF PREVIOUS YEAR’S COMMENTS

12.

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 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 101, 21.4.2009, p. 26.

(2) The Annex II summarises the Agency’s competences and activities. It is presented for information purposes.

(4) These comprise the budgetary outturn account and the annex to the budgetary outturn account.

(5) Articles 62 and 68 in conjunction with Articles 53 and 58 of Regulation (EU, Euratom) No 966/2012 (OJ L 298, 26.10.2012, p. 1).

(7) Article 162 of Regulation (EU, Euratom) No 966/2012.

ANNEX I

Follow-up of previous year’s comments

Year

Court's comment

Status of corrective action

(Completed/Ongoing/Outstanding/N/A)

2012

The level of committed appropriations was high at 99 % for both title I (staff expenditure) and title II (administrative expenditure). Although carry-overs of committed appropriations were relatively high for title II at 28 %, they mainly related to services received in 2012 for which invoices had not been issued at year-end (building costs and IT consultancy) and to the multi-annual nature of activities (experts’ project reviews and project audits).

N/A

ANNEX II

Education, Audiovisual and Culture Executive Agency (Brussels)

Competences and activities

Areas of Union competence deriving from the Treaty

(Articles 165(1), 166(1), 167(1) and 173(1) TFEU)

Collection of information

The European Union shall contribute to the development of quality education.

The European Union shall implement a vocational training policy.

The European Union shall contribute to the flowering of the cultures of the Member States.

The European Union and the Member States shall ensure that the conditions necessary for the competitiveness of the Union’s industry exist.

Competences of the Agency

(Council Regulation (EC) No 58/2003; Commission Decision 2009/336/EC, as amended by Decision 2012/797/EU; Commission Decision C(2009) 3355 as amended by Decision C(2012) 9475 final)

Objectives

In the framework of the education, culture and industry policies, numerous measures have been taken to promote education, vocational training, audiovisual, culture, youth and active citizenship in the European Union. The main objectives of these measures are to reinforce social cohesion and to contribute to competitiveness, to economic growth and to an ever closer union amongst the people of Europe.

These measures include a variety of programmes.

The Agency is responsible for managing certain strands of these programmes — e.g. Lifelong learning, Culture, Youth in Action, Europe for Citizens, MEDIA, Erasmus Mundus, MEDIA Mundus and Tempus. In this respect, it implements the aid of the Union, except for tasks which require discretionary powers in translating political choices.

Tasks

—	To manage, throughout their duration, the projects implementing the Union programmes entrusted to it and to perform the necessary checks to that end, by adopting the relevant decisions where the Commission has empowered it to do so,

—	to adopt the instruments of budget implementation for revenue and expenditure and to carry out, where the Commission has empowered it to do so, the operations necessary for the management of the Union programmes and, in particular, those linked to the award of grants and contracts,

—	to gather, analyse and pass on to the Commission all the information needed to guide the implementation of the Union programmes,

—	to implement, at EU level, the network of information on education in Europe (Eurydice) and activities intended to improve understanding and knowledge of the field of youth through the collection, analysis and dissemination of information and production of studies and publications.

Governance

Steering Committee

Composition

Comprises five members appointed by the European Commission.

Duties

It adopts the Agency's annual work programme after approval by the European Commission. In addition, it adopts the administrative budget of the Agency and its annual activity report.

Director

Appointed by the European Commission.

External audit

European Court of Auditors.

Internal audit

Internal Audit Capability.

European Commission's Internal Audit Service (IAS).

Discharge authority

European Parliament acting on a recommendation from the Council.

Resources made available to the Agency in 2013 (2012)

Budget

The 2013 administrative budget of the Agency was 51 (50) million euro (100 % financed by the general budget of the European Union).

The Agency has managed 850 (728) million euro related to the programmes and projects delegated by the Commission to the Executive Agency.

Staff as at 31 December 2013

Temporary staff: 105 (103) posts for temporary staff in the establishment plan Post occupied: 99 (99)

Contract staff: 348 (335) contract staff posts Posts occupied: 336 (329)

Total staff: 435 (428) posts occupied by staff undertaking the following tasks:

Operational: 352 Administrative: 83

Products and services in 2013 (2012)

Communication

—	Participation in 19 Info days organised by National Agencies/Structures and several other information sessions in Brussels, update of EVE (1) database with project results, organisation of events in cooperation with parent Directorates-General (DGs).

—	Kick-off meetings were organised in Brussels for new project coordinators and partners.

—	Thematic cluster meetings and meetings with project coordinators were held in different locations.

Selections

—	28 calls for proposals were published as well as one call for tenders.

—	The corresponding detailed fact sheets (or descriptions) of selected proposals (compendia) were published on the Agency's website.

—	Management of the approximately 15 000 proposals received.

—	Selection of approximately 4 000 projects and 4 308 Erasmus Charters for Higher Education.

Monitoring visits

—	More than 310 monitoring missions (on site or in Brussels) with project participants were organised in order to monitor 310 projects.

Simplification measures

—	The use of e-forms was extended to cover more actions, i.e. 91 % of all applications.

—	Simplified contracting was expanded (decisions instead of grant agreements) for some actions.

—	The lump sum calculation method was refined and applied to more actions.

—	Greater use was made of remote expert briefings and remote project evaluation to evaluate actions.

—	Audit certificates were drawn up to simplify financial reporting and will be gradually deployed.

—	A financial information kit to enhance guidance for beneficiaries was finalised and made available.

Cooperation with parent DGs

—	Organisation of four Steering Committee meetings.

—	Periodic coordination meetings on the delegated programmes with the parent DGs Operational Directors (three meetings per year).

—	Assistance to the parent DGs in the preparation of the next generation of programmes.

—	Providing information on programme implementation to the Commission on request.

—	Implementation of the action plan following the 2nd interim evaluation of the Agency

—	Close cooperation with parent DGs in the preparation of the new programmes for 2014-2020.

Policy support

—	Continuous management of the Eurydice network for policy support in the field of education; it has been also extended to the field of youth.

—	Several reports produced by the Eurydice unit.

Audits

114 audits under the 2012 audit plan are being implemented. 114 new audits are scheduled under the 2013 audit plan.

Contracts and projects:

5 492 contracts were signed, 4 969 projects were closed.

Mandate

—	The mandate of the Agency was extended in 2013. The extension was adopted by the Commission in December.

(1) Electronic platform for the dissemination and exploitation of results of projects supported by programmes managed by the European Commission in the fields of education, training, culture, youth and citizenship.

Source: Annex supplied by the Agency.

THE AGENCY’S REPLY

11:	The Agency takes note of the Court's comments. Compared to last year, the level of carried-over appropriations has been reduced. The Agency will continue the efforts put in place to control and further reduce the rate of carry-over.

10.12.2014

Official Journal of the European Union

C 442/74

REPORT

on the annual accounts of the Executive Agency for Competitiveness and Innovation for the financial year 2013, together with the Agency’s replies

(2014/C 442/09)

INTRODUCTION

The Executive Agency for Competitiveness and Innovation (hereinafter ‘the Agency’, aka ‘EACI’), which is located in Brussels, is the former Intelligent Energy Executive Agency (IEEA). Its mandate and duration were modified by Commission Decision 2007/372/EC (1) amending Decision 2004/20/EC (2). The Agency was established for a period beginning on 1 January 2004 and ending on 31 December 2015, to manage EU actions in the field of energy, entrepreneurship and innovation, and sustainable freight transport (3).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Agency, which comprise the financial statements (4) and the reports on the implementation of the budget (5) for the financial year ended 31 December 2013, and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Agency and the legality and regularity of the underlying transactions (6):

(a)

(b)

The auditor’s responsibility

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

Opinion on the legality and regularity of the transactions underlying the accounts

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 are legal and regular in all material respects.

10.	The comments which follow do not call the Court’s opinions into question.

COMMENTS ON BUDGETARY MANAGEMENT

11.

Although budget implementation rates for 2013 were satisfactory, the extent to which appropriations carried over from 2012 were cancelled in 2013 (2 15 000 euro, or 19 % of carry-overs) indicates weaknesses in the Agency’s budget planning and is at odds with the budgetary principle of annuality. These cancellations are mainly related to provisional commitments made for routine administrative expenditure.

FOLLOW-UP OF PREVIOUS YEAR’S COMMENTS

12.

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 140, 1.6.2007, p. 52.

(2) OJ L 5, 9.1.2004, p. 85.

(3) Annex II summarises the Agency’s competences and activities. It is presented for information purposes.

(5) These comprise the budgetary outturn account and the annex to the budgetary outturn account.

(6) Articles 62 and 68 in conjunction with Articles 53 and 58 of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).

(8) Article 162 of Regulation (EU, Euratom) No 966/2012.

ANNEX I

Follow-up of previous year’s comments

Year

Court’s comment

Status of corrective action

(Completed/Ongoing/Outstanding/N/A)

2012

The Agency’s Internal Audit Capability (IAC) is also responsible for the Agency’s ex post verifications, which form part of its internal control system. This reduces the IAC’s resources for internal audit activities and means that it is not in a position to carry out independent audits in this area. This dual role is incompatible with the Internal Control Standards and International Standards for the professional practice of Internal Auditing.

Completed

2012

There is room for improving the recruitment procedures: selection criteria were not fully in line with those mentioned in the vacancy notice; certain selection criteria were weighted disproportionately; no threshold scores for the pre-selection phase and no maximum number of candidates for the reserve lists were set in advance; the justification for the exclusion of candidates at the final stage of the procedures was not always sufficiently documented and declarations on confidentiality and absence of conflict of interest were not always signed.

Completed

ANNEX II

Executive Agency for Competitiveness and Innovation (Brussels)

Competences and activities

Areas of Union competence deriving from the Treaty on the Functioning of the European Union (TFEU)

‘Union policy on the environment shall contribute to […] preserving, protecting and improving the quality of the environment; protecting human health; prudent and rational utilisation of natural resources; [and] promoting measures at international level to deal with regional or worldwide environmental problems, and in particular combating climate change.’

(Article 191 TFEU)

‘The Union and the Member States shall ensure that the conditions necessary for the competitiveness of the Union’s industry exist [by taking] action aimed at speeding up the adjustment of industry to structural changes; encouraging an environment favourable to initiative and to the development of […] and cooperation between undertakings; [and] fostering better exploitation of the industrial potential of policies of innovation, research and technological development. The Member States shall consult each other in liaison with the Commission and, where necessary, shall coordinate their action. The Commission may take any useful initiative to promote such coordination.’

(Article 173 TFEU)

‘The European Parliament and the Council shall […] lay down common rules applicable to international transport to or from the territory of a Member State or passing across the territory of one or more Member States; [as well as] the conditions under which non-resident carriers may operate transport services within a Member State, [and] measures to improve transport safety.’

(Articles 91(1) and 100(2) TFEU)

‘Union policy on energy shall aim […] to ensure the functioning of the energy market; ensure security of energy supply in the Union; promote energy efficiency and energy saving and the development of new and renewable forms of energy; and promote the interconnection of energy networks.’

(Article 194(1) TFEU)

Competences of the Agency

(as defined in Commission Decision 2004/20/EC, amended by Decision 2007/372/EC)

Objectives

Within the framework of the Lisbon strategy for growth and jobs, the European Union has taken measures to promote and develop competitiveness and innovation. These measures include the establishment of the Competitiveness and Innovation Framework Programme (CIP) 2007-2013 (Decision No 1639/2006/EC of the European Parliament and of the Council), notably with the programmes Intelligent Energy — Europe (IEE) and Entrepreneurship and Innovation (EIP). The main objectives are to foster competitiveness of enterprises, in particular SMEs; to promote all forms of innovation, as well as eco-innovation; to promote energy efficiency and new and renewable energy sources. The measures taken in the framework of the Lisbon strategy also include the second Marco Polo (MP) programme (Regulation (EC) No 1692/2006 of the European Parliament and of the Council). The main objectives are to reduce congestion, improve the environmental performance of the transport system and to enhance inter-modal transport, thereby contributing to efficient and sustainable transport systems and to competitiveness and innovation, especially of SMEs. Under these EU programmes, the Agency is responsible for all implementing tasks concerning EU aid, except for programme evaluation, monitoring of legislation and strategic studies, or any other action which comes under the exclusive competence of the European Commission.

Tasks

Implementing the EU programmes according to the delegations received from the Commission:

—	To manage all phases in the lifetime of specific projects.

—	To carry out all operations necessary to manage the EU programmes, in particular budget implementation, including the awarding of contracts and grants.

—	To gather, analyse and pass on to the Commission all the information needed to guide the implementation of the programmes, as well as to promote coordination and synergy among the programmes.

—	As regards the EIP, to be in charge of project management and network animation of the Enterprise Europe Network, eco-innovation pilot and market replication projects, and innovation actions with a high degree of standardisation (IP Base project).

Governance

Steering Committee

Comprises five members appointed by the European Commission. It adopts the Agency’s annual work programme after approval by the European Commission. It also adopts the administrative budget of the Agency and its annual activity report.

Director

Appointed by the European Commission.

External audit

European Court of Auditors.

Discharge authority

European Parliament, acting on a recommendation by the Council.

Resources made available to the Agency in 2013 (2012)

Budget

Operational budget

The total planned amount was 242,9(241,3) million euro (of which 100 % came from the general budget of the EU). This amount was committed, and 213,9 million euro was paid, as approved by the Budgetary Authority. EACI implements the operational budget under the responsibility of the Commission.

—	IEE: 91,9(83,9) million euro

—	EIP eco-innovation: 33,1(35,0) million euro

—	EIP-Networks: 51,2(57,4) million euro

—	MP: 66,8(65,1) million euro

Administrative budget

The Agency had an administrative budget of 16,4(16,4) million euro, for which EACI is independently responsible. The Agency’s administrative budget was subsidised by the EU at a rate of 100 %.

Staff at 31 December 2013

—	Total staff: 163 (162) budgeted posts, of which 161 (156) were occupied

—	Temporary staff: 37 (37) budgeted posts, of which 35 (37) were occupied

—	Contract staff: 126 (125) budgeted posts, of which 126 (119) were occupied

Products and services provided in 2013

EACI is responsible for the management of Union actions in the fields of energy; entrepreneurship and innovation (including eco-innovation); and sustainable freight transport, under the following Union programmes:

—	The following parts of the Competitiveness and Innovation Framework programme: Intelligent Energy Europe programme II (2007-2013); project management and animation activities of the Enterprise Europe Network; IPR projects and eco-innovation first application and market replication projects

—	The Marco Polo I (2003-2006) and II (2007-2013) programmes

—	The Intelligent Energy Europe I programme (2003-2006)

Intelligent Energy Europe (IEE)

Key activities

—

The Agency kept in close contact with potential beneficiaries: it answered more than 1 400 email enquiries and attended 18 information days. It also took part in more than 120 project meetings and organised 10 contractors’ meetings, including one important event organised together with DG REGIO and two large Build Up Skills meetings with representatives from the construction, vocational training and energy sectors of 30 countries. Thousands of players in the energy sector also answered the 2013 call for proposals; more proposals were received by the Agency than ever before. The call for proposals led to the biggest evaluation exercise ever carried out by the Agency. More than 550 applications were received by the main deadline.

—

Thanks to its close contacts with project beneficiaries and other market participants, the Agency provided informed feedback to DG ENER on a wide range of topics. The most significant contribution was on the Horizon 2020 Energy work programme (2014-2015). The Agency took an active part in the working groups established by DG RTD on cross-cutting issues, evaluation and submission, and performance indicators. It also contributed to all of the inter-service meetings and all of the Shadow Programme Committee meetings. Other contributions concerned the Communication on Energy Technology and Innovation, as well as policy work on mobilising financing for sustainable energy investments, building capacity, reinforcing market surveillance, promoting the uptake of nearly-zero energy buildings, and addressing biomass sustainability.

—

The Agency also provided input on initiatives from other DGs, including DG MOVE’s Urban Mobility Package; DG MARE’s Communication on Blue Energy; DG AGRI’s Standing Forestry Committee; and DG CONNECT’s inter-service group on lighting. Through its new Build Up Skills initiative, the Agency mobilised players from the construction, vocational training and energy sectors, and provided DG ENER, DG EMPL, DG EAC and DG ENTR with national data and roadmaps concerning the training of the construction workforce.

—

In 2013, the Agency dedicated further efforts to quantifying the impact of programmes. The Agency continued with its work in training project coordinators in the use of performance indicators. It also produced guidelines for calculating these indicators. The Agency showed that, since 2007, the IEE projects managed by the Agency had reached 40 million people across the EU through the media, delivered renewable energy equivalent to the annual electricity consumption of 6,7 million citizens, saved primary energy equivalent to the annual electricity use of 1,7 million households, and triggered nearly 3 billion euro in sustainable energy investments.

—

Finally, the Agency was involved with the 2013 European Sustainable Energy Week. A high-level policy conference took place in Brussels; it attracted more than 3 000 participants. In addition, 91 other events took place in Brussels and 589 Energy Days were held across Europe. The Agency’s extensive media work resulted in 253 media mentions, with a potential audience of almost 25 million people.

Eco-innovation

Key activities

Eco-innovation is supported via the CIP through several types of measures (financial instruments, networks of national and regional actors, first application and market replication projects). The Agency is entrusted with the management of the eco-innovation first application and market replication projects with a budget of approximately 200 million euro for the 2008-2013 period.

In 2013, efforts were concentrated on the following areas.

—	Completion of the implementation of the 2012 call for proposals. The majority of negotiations were completed in June and July. Some individual agreements were signed later in the year. In all, 46 grant agreements were signed.

—

New call for proposals: the 2013 call for proposals, which was launched in May 2013, was followed by a successful European information day with 340 participants and 420 web viewers. During the event, 70 bilateral meetings were held. At these meetings, participants were able to discuss proposal ideas with members of staff familiar with eco-innovation. The Agency attended six national information days. This call for proposals attracted a record number of submissions (461).

—	Experiences with close-to-market projects and the results of the study on results and impact of eco-innovation projects were shared with the Commission (Horizon 2020 working groups and the LIFE team). They were presented in a press event with Environment Commissioner Potočnik.

Marco Polo programme

Key activities

—

The European information day in April attracted 173 participants (and a further 528 live web stream viewers). On this occasion, 42 bilateral meetings with potential Marco Polo beneficiaries were organised. To attract potential beneficiaries, an advertising campaign targeting 6 25 000 readers was launched.

—	The 2013 call for proposals was published on 26 March; it closed on 23 August. A total of 61 proposals were received. Pre-evaluations were carried out between 9 and 20 September.

—	In the 2012 call for proposals, from the 54 proposals received, 26 projects were successfully negotiated. The award decision was adopted on 23 May (after approval by DG MOVE);

—	Management of on-going projects: 16 on-site verification visits took place. Additionally, the time to grant was drastically reduced between 2012 and 2013 (by 118 days), thanks to the efforts undertaken by the Marco Polo Unit to speed up the contracting process.

—

During the last quarter, the practical arrangements for the transfer of the management of the Marco Polo Programme from EACI to INEA (from 1 January 2014). continued in close cooperation between the two Agencies. A message to stakeholders ensured that all were aware about the upcoming management changes.

EIP programme — Enterprise Europe Network

Key activities

The programme is made up of more than 600 partner organisations in more than 50 countries, including the 28 EU Member States. In addition to project management tasks for 92 contracts (specific grant agreements) and the IPeuropAware project, the EACI is also responsible for supporting the Enterprise Europe Network and for managing the IT tools and databases used for interactive communication among the network partners.

—

In June 2013, the new IT system for the Network (the ‘Merlin’ project) was launched. This major and successful event was a key step towards modernising the IT tools used by Network partners, which will not only facilitate cooperation and communication among them but will also allow further improvements to be made efficiently.

—

The annual conference in Vilnius, organised in association with the Lithuanian EU Council Presidency, held in order to promote events and policies of direct relevance to SMEs at EU level with Network partners, attracted 725 participants. A subsequent satisfaction survey showed very positive levels of feedback (86 % of respondents indicated that they were ‘satisfied’ or ‘very satisfied’).

—

In 2013, the Agency continued to provide support to network partners in recruiting SMEs to take part in Missions for Growth, Vice-President Tajani’s initiative to stimulate closer cooperation between the EU and the countries concerned as a means of generating growth and jobs on both sides. The Agency actively contributed to nine of these missions.

—

In April, the Agency provided DG ENTR with a note with concrete ideas for the future of the Network under COSME. The note focused on the overall architecture of the Network and its regional consortia, the strengthening of the Network’s regional footing, visibility, competence and excellent quality, differentiation of services and budgetary as well as contractual arrangements. The paper served as an input to help the Commission define the most suitable policy, taking into consideration the experiences gained in the day-to-day management of the Network over the past years.

Source: Annex supplied by the Agency.

THE AGENCY’S REPLIES

11.

As every year, we reviewed our commitments end 2012 on the basis of our best knowledge and carried over around EUR 1,125 million of payment appropriations (less than 8 % of the 2012 budget) to cover our obligations.

A part of these carried over appropriations (0,215 million euro) was finally cancelled because the payments actually due were lower than expected. The main reasons were: first, a subcontractor that could not deliver all its work before year-end; second, lower amounts paid on certain commitments, due to external factors (share of costs related to the building and in SLAs, experts who worked in the last weeks of 2012); third, the number of budget lines (more than 20), which made that small amounts of a few thousand euros or less on each line, contributed to the cumulated amount of 0,215 million euro pointed by the Court of Auditors.

It is worth noting nevertheless that this amount of 0,215 million euro was 30 % lower than the year before (0,309 million euro) and represented 1,5 % only of the 2012 administrative budget of the Agency.

The new structure of the administrative budget adopted as of 2014, with less budget lines, should to some extent make it easier to reduce cancellations of carried-over appropriations.

10.12.2014

Official Journal of the European Union

C 442/83

REPORT ON THE ANNUAL ACCOUNTS

of the Executive Agency for Health and Consumers for the financial year 2013, together with the Agency’s replies

(2014/C 442/10)

INTRODUCTION

The Executive Agency for Health and Consumers (hereinafter ‘the Agency’, aka ‘EAHC’), located in Luxembourg, was set up by Commission Decision No 2004/858/EC (1) and amended by Decision No 2008/544/EC (2). The Agency was established for a period beginning 1 January 2005 and ending 31 December 2015 for the management of Union actions in the field of health and consumer policy (3). By Commission Decision No 2013/770/EU (4), the Agency was replaced by its legal successor Consumers, Health and Food Executive Agency (CHAFEA) established for a period beginning 1 January 2014 and ending 31 December 2024.

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Agency, which comprise the financial statements (5) and the reports on the implementation of the budget (6) for the financial year ended 31 December 2013, and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Agency and the legality and regularity of the underlying transactions (7):

(a)

The management’s responsibilities in respect of the Agency's annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (8); making accounting estimates that are reasonable in the circumstances. The Director approves the annual accounts of the Agency after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the Agency in all material respects.

(b)

The auditor’s responsibility

The Court’s responsibility is, on the basis of its audit, to provide the European Parliament and the Council (9) 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 Agency are free from material misstatement and the transactions underlying them are legal and regular.

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

Opinion on the legality and regularity of the transactions underlying the accounts

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 are legal and regular in all material respects.

10.	The comments which follow do not call the Court’s opinions into question.

COMMENTS ON BUDGETARY MANAGEMENT

11.

Of the 1,1 million euro carried over from 2012, 0,23 million euro or 21 % were cancelled in 2013. Such a high level of cancellations indicates weaknesses in budget planning, particularly in forecasting costs for meetings with external participants.

12.

The overall level of committed appropriations was relatively low at 94 %. The 2013 payment rates against committed appropriations were satisfactory for title I and II at 97 % and 87 % respectively. Although carry-overs for title III are high at 1,0 million euro or 43 % of committed title III appropriations, they reflect the multiannual nature of the Agency’s activities and payments were planned and made according to operational needs.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

13.

An overview of the corrective actions taken in response to the Court's comments from previous years is provided in Annex I.

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 369, 16.12.2004, p. 73.

(2) OJ L 173, 3.7.2008, p. 27.

(3) Annex II summarises the Agency’s competences and activities. It is presented for information purposes.

(4) OJ L 341, 18.12.2013, p. 69.

(5) 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.

(6) These comprise the budgetary outturn account and the annex to the budgetary outturn account.

(7) Articles 62 and 68 in conjunction with Articles 53 and 58 of Regulation (EU, Euratom) No 966/2012 (OJ L 298, 26.10.2012, p. 1).

(8) 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.

(9) Article 162 of Regulation (EU, Euratom) No 966/2012.

ANNEX I

Follow-up of previous years’ comments

Year	Court's comment	Status of corrective action (Completed/Ongoing/Outstanding/N/A)
2011	For title III — Expenditure related to operational expenditure, an amount of 0,8 million euro, or 46 % of commitments made, was carried forward to 2012. The high level of carry-over is at odds with the budgetary principle of annuality.	N/A
2012	Of the 1,1 million euro carried over from 2011, 0,2 million euro (18 %) were cancelled in 2012. Although this is partly related to difficulties in forecasting costs for meetings with external participants, such a high level indicates deficits in terms of budget planning.	N/A
2012	The 2012 payment rates against committed appropriations are satisfactory for title I and II at 96 % and 84 % respectively. Carry-overs for title III, however, are high at 1,1 million euro or 47 % of committed title III appropriations. Although this is partly related to the late presentation of mission cost claims by external meeting participants, such a high level is at odds with the budgetary principle of annuality.	N/A

ANNEX II

Executive Agency for Health and Consumers (Luxembourg)

Competences and activities

Areas of Union competence deriving from the Treaty

(Article 168 and 169 of the Treaty on the Functioning of the European Union)

A high level of human health protection shall be ensured in the definition and implementation of all Union policies and activities. Union action, which shall complement national policies, shall be directed towards improving public health, preventing human illness and diseases, and obviating sources of danger to human health. Such action shall cover the fight against the major health scourges, by promoting research into their causes, their transmission and their prevention, as well as health information and education. The Union shall complement the Member States' action in reducing drugs-related health damage, including information and prevention.

In order to promote the interests of consumers and to ensure a high level of consumer protection, the Union shall contribute to protecting the health, safety and economic interests of consumers, as well as to promoting their right to information, education and to organise themselves in order to safeguard their interests.

Competences of the Agency

Objectives

—

The Agency is responsible for carrying out the implementation tasks for the management of the second Public Health Programme 2008-2013 as adopted by Decision No 1350/2007/EC, the Consumer Programme for 2007-2013 as adopted by Decision No 1926/2006/EC and the food safety training measures covered by Regulation (EC) No 882/2004 and Directive 2000/29/EC.

—	The Agency also manages all the phases in the lifetime of the implementing measures delegated to it in the framework of the programme of Union action in the field of public health 2003-2008, adopted by Decision No 1786/2002/EC of the European Parliament and of the Council.

—	By its implementing Decision of 17 December 2013 (Ref. 2013/770/EU) the European Commission established the Consumers, Health and Food Executive Agency — Chafea — which replaced and succeeded the Executive Agency for Health and Consumers from 1 January 2014 to 31 December 2024.

—	As a consequence, any reference in this annex to the Executive Agency for Health and Consumers (EAHC) shall also be deemed a reference, as of 1 January 2014, to the newly established Consumers, Health and Food Executive Agency (Chafea), which is the legal successor of EAHC.

Tasks

Under the Union programmes mentioned below, the Agency is responsible for implementing the following tasks as defined in the delegation act adopted on 9 September 2008 (1):

Public Health Programme 2003-2008 — Decision No 1786/2002/EC

Public Health Programme 2008-2013 — Decision No 1350/2007/EC

Consumers Programme 2007-2013 — Decision No 1926/2006/EC

Food Safety Training Measures — Regulation (EC) No 882/2004 and Directive 2000/29/EC:

(a)	Managing all the phases of the cycle of projects (for monitoring and dissemination purposes, the Agency shall take the necessary steps to create a database of projects or to continue an existing one, incorporating a project description and the final results).

(b)	Monitoring projects implemented under these programmes and measures including the necessary checks.

(c)

Collecting, processing and distributing data and in particular compiling, analysing and transmitting to the Commission all information required to guide implementation of the Union programmes and measures, promote coordination and synergy with other programmes of the Communities, the Member States or international organisations.

(d)	Organising meetings, seminars, talks, and training measures.

(e)	Helping to evaluate the programme's impact, in particular the annual and/or mid-term evaluation of implementation of the programmes, and implementing the follow-up actions on evaluations decided by the Commission.

(f)	Disseminating the results of the information operations planned and implemented by the Commission.

(g)	Producing overall control and supervision data.

(h)	Participating in preparatory work on financing decisions.

Governance

Steering Committee

Comprises five members appointed by the European Commission. The members of the Steering Committee are appointed for two years.

It adopts the Agency's annual work programme after approval by the European Commission. In addition, it adopts the administrative budget of the Agency and its annual activity report.

Director

Appointed by the European Commission for four years.

External audit

European Court of Auditors.

Discharge authority

European Parliament following a recommendation from the Council.

Resources made available to the Agency in 2013 (2012)

Final Budget

The Agency's administrative budget for 2013 amounted to 7,23(7,22) million euro.

Staff at 31 December 2013

On 31 December 2013, the Agency employed 49 (50) statutory staff members, including 11 (11) temporary staff and 38 (39) contract staff.

Products and services 2013

Closing the 2005 — 2007 grants provided under the 2003 — 2008 Public Health Programme (PHP); monitoring the 2008 — 2012 grant provided under the second Health Programme — HP (2008 — 2013), successfully finalising negotiations for grants under the 2013 calls for proposals, including projects, conferences, operating grants and joint actions. Managed the 2013 call for proposals, the grants and contracts awarded under the 2008 calls for proposals and for tenders under the 2007 — 2013 Consumer Programme (CP); projects awarded under the 2007, 2008 and 2009 calls for tenders under Food Safety Training Measures.

HP work programme

—	The 2013 call for proposals was launched on 20 December 2012 and closed on 22 March 2013. It was published in the EU Official Journal (2) and on the EAHC (3) and Europa websites.

—	Project proposals: 9 of the 52 technically evaluated project proposals (17,3 %) were recommended for funding (excluding reserve list), for a total proposed EU co-funding of 1 2 2 43 354 euro.

—	Conference proposals: 11 of the 46 technically evaluated conference proposals (24 %) were recommended for funding. This amounts to a proposed EU co-funding of 7 19 758 euro.

—	Operating grant proposals: 20 of the 44 technically evaluated operating grant proposals (45,4 %) were recommended for funding. This amounts to a proposed EU co-funding of 5 2 93 430 euro.

—	Joint actions: All 5 joint action proposals submitted were recommended for EU co-funding of 1 3 5 72 397 euro.

—

Reserve lists have been established for projects, operating grants and conferences. For projects, 4 applications have been placed on the reserve list. In total these sum up to a proposed EU co-funding of 4 8 15 524 euro. For conferences a reserve list of 3 proposals was made (amounting to 2 75 934 euro) and for operating grants the reserve list comprises 4 submissions for a total of 4 25 280 euro co-funding.

—	13 open calls for tender, including 2 for framework contracts and 13 requests for services were published in 2013.

—	As most contracts were concluded at the end of 2013, work on them began towards the end of the year. EAHC hosted a kick-off meeting for each contract and closely monitored execution, in coordination with DG SANCO.

CP work programme

—	In 2013, the Agency, being entrusted with the implementation of parts of the (annual) Consumer Work Programme, launched 8 Calls for Proposals and 21 public procurement procedures.

—

The Agency awarded 56 grants for exchanges of officials between competent authorities of Member States (MS), giving the opportunity to enforcement officials to share experience and knowledge about the implementation of Directive 2001/95/EC on General Product Safety and of Regulation (EC) No 2006/2004 on Consumer Protection Cooperation (CPC).

—	The grant awarded for the implementation of joint actions pertaining to the General Product Safety Directive (GPSD) aimed at exchanging and implementing best practices between the competent authorities of the participating MSs and improving cross-border cooperation.

—	Following the accession of Croatia to the EU, the Agency signed the first grant for the support of the activities to be undertaken by the European Consumer Centre (ECC) in Croatia.

—

The Agency concluded a service contract providing for a support mechanism for the ECC-Network in order to improve its visibility and the impact of the ECC’s collective work. The development of quality standards is part of the service and will assist the ECC to measure its performance against the predefined indicators.

—

The Agency launched a number of procurement procedures to support the objective of consumer safety; the services requested resulted in the design and validation (in accordance with ISO rules) of graphical symbols conveying certain safety or warning messages to be used for child-care articles, products intended to facilitate sleep, relaxation, hygiene and the feeding of children.

—	The study on alcohol-powered flue-less fireplace combustion aimed at determining the effects of the emissions on indoor air quality via laboratory experiments.

—

Two sets of actions were agreed during 2013 in respect of consumer protection cooperation (CPC). The first focuses on enforcement of Community rules on unfair terms included in consumer contracts (Directive 93/13/EEC on unfair terms in consumer contracts — Unfair Terms Directive (UTD)). The action aims at creating a more uniform understanding of the UTD, and intends to enable enhanced information exchange between the competent authorities. The second intends to build and develop an Internet Researchers Network, promoting the creation of Internet Labs throughout the competent authorities in EU Member States.

—	In 2013 the Agency signed specific grants with the Bureau Européen des Unions de Consommateurs (BEUC) and has prepared the grant agreement with the European Association for the Coordination of Consumer Representation in Standardisation (ANEC).

—	The co-financing of BEUC will contribute to further promoting the interests of European consumers in the EU policy process as purchasers or users of goods and services.

—	The financial support given to ANEC ensures the representation and defence of consumer interests in the process of standardisation and certification.

BTSF work programme

—

The Agency launched 26 procurement procedures which led to the 29 service contracts signed in 2013. The service which will be provided with these contracts consists in the organisation of training courses designed to train staff of EU Member States and of the national authorities of candidate countries and ENP and EFTA countries which are involved in official control activities.

—

The purpose of the training is to keep the trainees up-to-date with all aspects of EU law in food-related areas and ensure that controls are carried out in a more uniform, objective and adequate manner in all Member States. These training courses will cover food-related legislation over a broad range, from Animal welfare to HACCP (Hazard Analysis and Critical Control point), from semen ova and embryos to risk assessment and from plant health to veterinary medicinal products.

—

With the additional third country-related BTSF programme financed via DG DEVCO’s and DG TRADE’s budgets, a specific training course will also be organised in third and developing countries with a view to familiarising the third country officials who are involved in food controls with EU standards and import requirements. It is planned that 2 100 third country officials will be trained.

—

With regard to the level of participants trained per year, the BTSF Initiative achieved a steady rate of around 6 000 participants, as planned from the outset, for trainees from Member States. Overall satisfaction reached the targeted 85 % while more than 90 % of the participants evaluated the knowledge gained as useful.

(1) Commission Decision of 9 September 2008 — delegating powers to the Agency.

(2) OJ C 378/6, 8.12.2012, http://ec.europa.eu/eahc/documents/health/calls/2013/HP_work_plan_for_2013.pdf

(3) http://ec.europa.eu/eahc/

Source: Annex supplied by the Agency.

THE AGENCY’S REPLIES

11.

The Agency takes note of the Court's observation. Efforts are made to further reduce the level of cancellation of commitment appropriations carried forward. Notably, related to meeting and information days specific actions are implemented to lower the cancellation from the observed 94 953 € (2013) to below 24 000 € (2014).

12.

The Agency takes note of the Court's observation and maintains its commitment to keep the level of carry forward of commitment appropriations — to the extent possible — low. Regarding the low overall level of commitmed appropriations — 94 % — it is to be noted that Title I (Staff Expenditure) represents 58,77 % of the total budget. The not fully implemented appropriations related principally to the Court of Justice ruling in November 2013 on the refused salary increases of 2011 and 2012, which concerns an isolated event.

10.12.2014

Official Journal of the European Union

C 442/93

REPORT

on the annual accounts of the European Aviation Safety Agency, for the financial year 2013 together with the Agency’s replies

(2014/C 442/11)

INTRODUCTION

The European Aviation Safety Agency (hereinafter ‘the Agency’, aka ‘EASA’), which is located in Cologne, was established by Regulation (EC) No 1592/2002 of the European Parliament and of the Council (1) as last amended by Regulation (EC) No 1108/2009 (2). The Agency has been given specific regulatory and executive tasks in the field of aviation safety (3).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Agency, which comprise the financial statements (4) and the reports on the implementation of the budget (5) for the financial year ended 31 December 2013, and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Agency and the legality and regularity of the underlying transactions (6):

(a)

The management’s responsibilities in respect of the Agency's annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (7); making accounting estimates that are reasonable in the circumstances. The Director approves the annual accounts of the Agency after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the Agency in all material respects.

(b)

The auditor’s responsibility

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

Opinion on the legality and regularity of the transactions underlying the accounts

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 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.

In 2012 EASA selected 14 National Aviation Authorities (NAAs) and 10 ‘Qualified Entities’ (QEs) through procurement procedures to outsource part of its certification activities (9). Expenditure for such outsourced certification activities amounted to some 22 million euro in 2013. The process of allocating specific certification tasks to NAAs and QEs and the criteria to be used are described in specific guidelines established by the Agency (10)..However, the transparency of outsourcing could be improved through better documentation of the allocation processes, including the assessments made on the basis of the criteria set in the guidelines. This is also the case for the allocation of the many other low-value contracts to bidders.

COMMENTS ON BUDGETARY MANAGEMENT

12.

The overall level of appropriations committed was high at 98 %. Although the Agency reduced further the overall level of carry-overs of committed appropriations from 10,1 million euro (11 %) in 2012 to 7,2 million euro (8 %) in 2013, carry-overs of committed appropriations for title III were high at 3,4 million euro (42 %). Although this is partly justified by the multiannual nature of the Agency’s operations and the carry-overs included in the Court’s sample were duly justified, such a high level is at odds with the budgetary principle of annuality.

OTHER COMMENTS

13.

The Agency became operational in 2004 and has, to date, worked on the basis of correspondence and exchanges with the host Member State. However, a comprehensive headquarters agreement between the Agency and the Member State has not been signed. Such an agreement would promote transparency in respect of the conditions under which the Agency and its staff operate.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

14.

An overview of the corrective action taken in response to the Court's comments from previous years is provided in Annex I.

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 1 July 2014.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

(1) OJ L 240, 7.9.2002, p. 1.

(2) OJ L 309, 24.11.2009, p. 51.

(3) Annex II summarises the Agency’s competences and activities. It is presented for information purposes.

(5) These comprise the budgetary outturn account and the annex to the budgetary outturn account.

(6) Articles 39 and 50 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).

(8) Article 107 of Regulation (EU) No 1271/2013.

(9) At the end of May 2014, 3 contracts with QEs had been terminated and consequently there were 14 active contracts with NAAs and 7 with QEs.

(10) ‘Guidelines for the allocation of certification tasks to National Aviation Authorities and Qualified Entities’, EASA Management Board Decision 01-2011.

ANNEX I

Follow-up of previous years’ comments

Year	Court's comment	Status of corrective action (Completed/Ongoing/Outstanding/N/A)
2011	At the end of 2011, the Agency held bank balances of 55 million euro (2010: 49 million euro) at one bank only. There was no treasury policy in place to limit this risk while gaining appropriate investment returns.	Completed
2012	The Agency established a standard procedure for ex ante verifications. However, the related checklists were not completed and documentation justifying the validation of expenditure was not always available (1).	Completed
2012	A methodology for ex post verifications was approved in 2009. Although the Agency made further developments in its implementation, room for improvement still exists in the following areas: there is still no annual planning of verifications, the sample of transactions to be checked is not risk-based and the methodology does not cover public procurement procedures.	Completed
2012	The overall level of appropriations committed was 95 %, varying between 96 % for title I (staff expenditure), 95 % for title II (administrative expenditure) and 89 % for title III (operational expenditure). However, carry-overs of committed appropriations were high for title III at 46 %. Although this is partly justified by the multiannual nature of the Agency’s operations and the carry-overs included in the Court’s sample were duly justified, such a high level is at odds with the budgetary principle of annuality.	N/A
2012	In one of the audited recruitment procedures, the selected candidate did not meet the Staff Regulations’ requirements as regards university degrees or equivalent professional training.	N/A

(1) Timesheets to justify services charged on a man/days basis did not exist.

ANNEX II

European Aviation Safety Agency (Cologne)

Competences and activities

Areas of Union competence deriving from the Treaty

(Article 100 of the Treaty on the Functioning of the European Union)

The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may lay down appropriate provisions for sea and air transport. They shall act after consulting the Economic and Social Committee and the Committee of the Regions.

Competences of the Agency

(The Agency's powers as defined in Regulation (EC) No 216/2008 of the European Parliament and of the Council (the ‘Basic Regulation’))

Objectives

—	To maintain a high uniform level of civil aviation safety in Europe and to ensure the proper functioning and development of civil aviation safety.

Tasks

—	To issue opinions and recommendations to the Commission,

—	to issue certification specifications, including airworthiness codes and acceptable means of compliance, and any guidance material for the application of the Basic Regulation and its implementing rules,

—	to take decisions regarding airworthiness and environmental certification, pilot certification, air operation certification, third country operators, inspections of Member States and investigation of undertakings,

—	to conduct standardization inspections of the competent authorities in the Member States, associated States and ex Joint Aviation Authority (JAA) States (in this case in accordance with working arrangements).

Governance

Management Board

Composition: consisting of one representative of each Member State and one representative of the Commission,

Tasks

The tasks of the Management Board are described in the Basic regulation and are, for example:

—	appointment of the Executive Director, and the Directors on a proposal from the Executive Director;

—	adoption of the annual general report on the Agency's activities;

—	adoption of the Agency's work programme for the coming year;

—	appointment of the members of the Board of Appeal pursuant to Article 41;

—	establishment of its Rules of Procedure;

—	establishment, if it so wishes, of working bodies to assist in carrying out its functions, including the preparation of its decisions and monitoring the implementation thereof.

Executive Director

Manages the Agency and is appointed by the Management Board on a proposal from the Commission.

The Board of Appeal

Decides on appeals against the Agency's decisions in accordance with Article 44 of Regulation (EC) No 216/2008 in certain respects such as certification, fees & charges and investigation of undertakings.

External audit

European Court of Auditors.

Discharge authority

European Parliament, acting on a recommendation by the Council.

Resources made available to the Agency in 2013 (2012)

Final Budget

Total budget: 151,2(150,2) million euro, including:

—	own revenue: 83,8(83,0) million euro (55,4 %)

—	union subsidy: 34,9(34,9) million euro (23,1 %)

—	contribution from non-EU countries: 1,7(1,7) million euro (1,1 %)

—	assigned revenue from fees and charges: 24,2(25,2) million euro (16,0 %)

—	other revenue: 0,9(0,9) million euro (0,6 %)

—	other subsidies: 5,7(4,4) million euro (3,8 %)

Staff as at 31 December 2013

692 (634) temporary staff in the establishment plan

Posts occupied: 647 (612)

Post occupied by other staff

Total: 100 (74,6) of which contract staff: 85 (63,3); seconded national experts: 15 (11,3); special advisors: 0 (0)

Total temporary staff: 648 (1) (613)

Filled posts subsidy-financed: 219 (2) (216)

Filled posts fee-financed: 429 (2) (396)

Products and services in 2013 (2012)

Opinions

12 Opinions

Rulemaking Decisions

28 Decisions related to: Certification specifications (8); Acceptable Means of Compliance and Guidance Material (20)

Additional deliverables in 2013 (which will lead to Rules in the forthcoming years)

32 Terms of Reference (ToRs), 26 Notices of Proposed Amendment (NPAs), 24 Comment Response Document (CRDs)

International Cooperation

12 Working Arrangements.

2 modifications of Appendices to a Working Arrangement

2 Rulemaking cooperation arrangements with EASA bilateral partners

Support for the negotiations of the EU — Ukraine Common Aviation Area Agreement (agreement was initialled in 2013)

10 recommendations provided on International Civil Aviation Organization (ICAO) State Letters.

BASA (Bilateral Aviation Safety Agreement)

Support for the ratification process of the BASA EU-Brazil and the process for the development of the relevant instruments required for the practical implementation of the Agreement.

Support for the implementation of the EU — US Bilateral Aviation Safety Agreement (BASA), including for the preparation of the board meetings, and the annual Flight Standards meeting with the Federal Aviation Administration (FAA).

Support to the European Commission for the development of new Annexes to the EU-US BASA (Flight Crew Licensing, Flight Simulation Training Devices, Pilot Training Organisations)

Certification decisions at 31 December 2013

Type Certificates/Restricted Type Certificates (TCs/RTCs): 11 (3)

Supplemental Type Certificates (STCs): 688

Airworthiness Directives (ADs): 382

Alternative Method of Compliance (AMOC): 82

European Technical Standard Order Authorisation (ETSOA): 214

Major changes/Major repairs/TC New Derivatives: 1 017

Minor changes/Minor repairs: 643

Aircraft Flight Manual (AFM): 318

Approval of flight conditions (PTF): 457

Flight Simulation Training Devices (FSTD): 311

Approval of Design organisations (AP and Alternative Procedures to DOA (AP-DOA): 550

Approval of Maintenance organisations (bilateral) (4): 1 544

Approval of Maintenance organisations (foreign) (4): 328

Approval of Maintenance training organisations (4): 52

Approval of Manufacturing (4): 23

Approval of Flight Crew Licencing Organisations (4): 15

Approval of ATM/ANS Organisations (4): 3

Standardisation inspections (number of inspections by type) at 31 December 2013

In the field of Airworthiness (AIR): 22

In the field of Operations (OPS): 16

In the field of flight crew licensing (FCL): 16

In the field of medical flight crew licensing (MED): 12

In the field of flight simulation training devices (FSTD): 9

In the field of Air Traffic Management/Air Navigation Services (ANS): 14

In the field of Safety Assessment of Foreign Aircraft (SAFA): 13

(1) Two structural part-time pilots occupy one post.

(2) The split of filled posts between fee-financed and subsidy-financed may change subject to possible revision of the cost-accounting allocation keys as of 31 December 2013.

(3) Only those TCs/RTCs are counted which were issued for a new design type. TCs issued as a result of grandfathering, transfer or administrative re-issuance are excluded.

(4) The organisation approval activity is subdivided into a main surveillance activity of already approved organisations (with a renewal every 2/3 years) and an activity linked to new approvals. The data supplied concern the total number of approvals on 31 December 2013.

Source: Annex supplied by the Agency.

THE AGENCY’S REPLIES

11.

In the frame of a better control of the certification activities outsourced to National Aviation Authorities (NAA) and potentially qualified entities (QE), the certification directorate (C) together with the finance directorate (F) will implement in 2014 a simple means to record that the selection of the provider for any given outsourcing purchase order has been made and optimised in accordance with the criteria of Annex 1 to ED decision 2011/056/F.

As regards shortlisting of candidates for low-value contracts the Agency will systematically consider the ECA’s comment in selecting invitees and documenting it accordingly as relevant.

12.

The Agency would like to highlight that great efforts have already been made to reduce the level of title III carry-overs and this is already reflected in the significant decrease compared to the previous year: i.e. 6,2 million euro in 2012 compared to 3,4 million euro in 2013.

During 2013 some appropriations had to be held back in case 2011 salary adjustments and were reassigned during the year to high priorities projects (rulemaking and safety research projects). This inhibited commitments early in the year resulting in a substantial impact on the level of carry overs at year end.

13.

As the EASA has already experienced some unclarities concerning our relations with our host state due to the absence of a proper seat agreement, the EASA acknowledges the recommendation and will work closely with the EU Council, Parliament and Commission, to establish a proper headquarters agreement.

Such agreement should — apart from promoting transparency of relations with the host Member State — ensure that the host State takes all necessary measures to facilitate the unimpeded exercise by the Agency of its legal mandate as well as clarifying the relations between national judicial authorities and the Agency.

10.12.2014

Official Journal of the European Union

C 442/102

REPORT

on the annual accounts of the European Asylum Support Office for the financial year 2013, together with the Office’s replies

(2014/C 442/12)

INTRODUCTION

The European Asylum Support Office (hereinafter ‘the Office’, aka ‘EASO’), which is located in Valletta, was established by Regulation (EU) No 439/2010 of the European Parliament and of the Council (1). The Office’s task is to support the development of the Common European Asylum System. It was established with the aim of enhancing practical cooperation on asylum matters and helping Member States fulfil their European and international obligations to give protection to people in need. EASO acts as a centre of expertise on asylum. It also provides support to Member States whose asylum and reception systems are under particular pressure.

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

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 system. This is supplemented by evidence provided by the work of other auditors (where relevant) and an analysis of management representations.

STATEMENT OF ASSURANCE

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Office, which comprise the financial statements (2) and the reports on the implementation of the budget (3) for the financial year ended 31 December 2013; and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

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 (4):

(a)

The management’s responsibilities in respect of the Office’s annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (5); making accounting estimates that are reasonable in the circumstances. The Director approves the annual accounts of the Office after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the Office in all material respects.

(b)

The auditor’s responsibility

The Court’s responsibility is, on the basis of its audit, to provide the European Parliament and the Council (6) 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.

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

In the Court’s opinion, the Office’s annual accounts present fairly, in all material respects, its financial position as at 31 December 2013 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

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 are legal and regular in all material respects.

10.	The comments which follow do not call the Court’s opinions into question. They should be considered in the light of the fact that 2013 was the Agency’s first full year of financial autonomy.

COMMENTS ON THE RELIABILITY OF THE ACCOUNTS

11.

The basis for an accrual amounting to 40 000 euro relating to expenses and allowances for staff who entered into service in 2013 was not made available in the course of the audit.

COMMENTS ON INTERNAL CONTROLS

12.

Of the total number of payments, 446 (18 %) were made after the time limits set in the Financial Regulation. The average delay for late payments was 21 days.

13.

Six of the 16 internal control standards have not been fully implemented.

COMMENTS ON BUDGETARY MANAGEMENT

14.

The Agency had overestimated its budgetary needs for 2013 by 13 % (2012: 32 %) and only 10,4 million of the 12 million euro budget were committed. Appropriations carried over amounted to 2,5 million euro or 24 % (2012: 65 %) of total committed appropriations, of which 3 37 031 euro were not covered by a legal commitment. While there is scope for improved budgetary planning, both the overestimation of budgetary needs and the carry-overs of committed appropriations were significantly lower than the previous year.

15.

Carry-overs of committed appropriations mainly concern title II (other administrative expenditure) at 5 40 269 euro, i.e. 31 % of committed appropriations, and title III (operational activities) at 1 8 41 798 euro (45 % of committed appropriations). They are mostly related to invoices not yet received and/or paid at year-end or where the services in question had not been delivered.

OTHER COMMENTS

16.

There is room to improve the transparency of recruitment procedures: questions for interviews and written tests were drafted after examination of the applications, which increases the risk of questions being influenced by individual applications; the selection committees did not always award scores to all selection criteria included in the vacancy notices; the declaration of conflict of interest signed by selection committee members only considers a personal relationship to constitute a potential conflict of interest and explicitly excludes professional relationships; in the case of one specific recruitment procedure a discrepancy was noted between one eligibility criterion indicated in the vacancy notice and the corresponding selection criterion concerning the number of years of proven professional experience.

FOLLOW-UP OF PREVIOUS YEAR’S COMMENTS

17.

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 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 132, 29.5.2010, p. 11.

(2) 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.

(3) These comprise the budgetary outturn account and the annex to the budgetary outturn account.

(4) Articles 39 and 50 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).

(5) 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.

(6) Article 107 of 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	The Office’s accounting system has not yet been validated by the Accounting Officer.	Completed
2012	A carry-over of 0,2 million euro was not covered by a legal commitment (contract) and was therefore irregular.	N/A
2012	No physical inventory has been performed to ensure that all equipment purchased to set up the Office is included in the register.	Completed
2012	Fifty payments, representing about 20 % of the total amount of payments, were made after the deadlines set by the Financial Regulation.	N/A
2012	Ten of the 16 internal control standards (1)have not yet been fully implemented.	Ongoing
2012	The budgetary needs for 2012 were considerably overestimated: only 4,8 million euro out of the 7 million euro transferred upon receiving financial autonomy were committed.	N/A
2012	Committed appropriations of 3,2 million euro have been carried over, representing 65,13 % of total committed appropriations for the period of financial autonomy (2). These carry-overs concern title I (staff expenditure) at 0,3 million euro, title II (other administrative expenditure) at 1,4 million euro and title III (operational activities) at 1,5 million euro. They are mostly related to invoices not yet received and/or paid at year-end and to pending reimbursements of costs relating to experts. Furthermore, some 0,8 million euro concern refurbishment work carried out at the Office’s premises in 2012, for which the payments will be made following final acceptance (3). Such a high level of carry-overs is however at odds with the budgetary principle of annuality.	N/A
2012	The amounts of several budget commitments were insufficient to cover the related goods and services delivered. The estimated amount of deliveries not covered was 0,2 million euro, resulting in a corresponding overstatement in the Budget Outturn Account.	N/A
2012	EASO coordinates the deployment of Member States’ experts to support other Member States in crises (emergency support actions) and reimburses experts’ mission costs on a flat-rate basis. Total reimbursed mission costs amounted to some 4 17 000 euro (24 % of total payments). Flat-rate reimbursements of costs were also made to external participants attending meetings held at EASO’s premises. Meeting costs are spread over various budget lines and the total amount is unknown. Although the application of flat rates reduces administrative burdens, they may be higher than the actual costs incurred.	N/A
2012	To host EASO, the Maltese Government offered the building (4) and the lease agreement with the Maltese Transport Authority stipulates that the premises ‘are being transferred in a finished state with essential service points being provided’. For the building to become functional, however, it needed to be adapted (5) at an estimated cost of 4,3 million euro, of which 3,8 million euro was to be covered by the Commission. By the end of 2012, most of the work had been completed and advance payments amounting to some 3 million euro had been made to the Maltese Government. Furthermore EASO will pay rent amounting to some 3,7 million euro over a nine-year period.	N/A
2012	The Commission had informed the European Parliament and Council about the host arrangements and the fact that the building required some adaptation to be financed by the Maltese Government and the Commission. Although the budgetary authorities were informed about the project, there is no evidence that they were aware of the expected costs and the EU’s share thereof.	N/A
2012	There is room to improve the transparency of recruitment procedures: there was no evidence that weightings and threshold scores to be invited for interviews and for being put on the reserve list were set before examination of the applications, or that questions for interviews and written tests were set before the examination of applications.	Outstanding

(1) ICS Nos 3, 4, 5, 6, 8, 9, 10, 11, 13 and 14.

(2) 40,32 % when taking the full 2012 calendar year into account.

(3) Final acceptance was on-going in May 2013.

(4) Described in the bid as state of the art.

(5) According to the related grant agreement between the Commission and the Maltese Government, this includes i.e. the modification of office space layout, double glazing, IT and security infrastructure, installation of a conference room, etc.

ANNEX II

European Asylum Support Office, EASO (Valletta Harbour, Malta)

Competences and activities

Areas of Union competence deriving from the Treaty

(Article 3 of the Treaty on European Union and Articles 67, 78 and 80 of the Treaty on the Functioning of the European Union)

The Union shall offer its citizens an area of freedom, security and justice without internal frontiers, in which the free movement of persons is ensured in conjunction with appropriate measures with respect to external border controls, asylum, immigration and the prevention and combating of crime.

The Union shall develop a common policy on asylum, subsidiary protection and temporary protection with a view to offering appropriate status to any third-country national requiring international protection and ensuring compliance with the principle of non-refoulement. This policy must be in accordance with the Geneva Convention of 28 July 1951 and the Protocol of 31 January 1967 relating to the status of refugees, and other relevant treaties.

For that purpose, measures should be adopted for a common European asylum system comprising: a uniform status of asylum for nationals of third countries, valid throughout the Union; a uniform status of subsidiary protection for nationals of third countries who, without obtaining European asylum, are in need of international protection; a common system of temporary protection for displaced persons in the event of a massive inflow; common procedures for the granting and withdrawing of uniform asylum or subsidiary protection status; criteria and mechanisms for determining which Member State is responsible for considering an application for asylum or subsidiary protection; standards concerning the conditions for the reception of applicants for asylum or subsidiary protection; partnership and cooperation with third countries for the purpose of managing inflows of people applying for asylum or subsidiary or temporary protection.

In the event of one or more Member States being confronted by an emergency situation characterised by a sudden inflow of nationals of third countries, provisional measures may be adopted for the benefit of the Member State(s) concerned.

The policy of the Union on asylum and its implementation shall be governed by the principle of solidarity and fair sharing of responsibility, including its financial implications, between the Member States.

Competences of the Office

(Regulation (EU) No 439/2010 of the European Parliament and of the Council establishing a European Asylum Support Office)

Objectives

EASO contributes to the implementation of a Common European Asylum System. EASO’s purpose is to facilitate, coordinate and strengthen practical cooperation among Member States on the many aspects of asylum, such as: providing practical and operational support to Member States; providing operational support to Member States with specific needs or Member States subject to particular pressure on their asylum systems; providing scientific and technical assistance for EU policymaking and legislation in all areas having a direct or indirect impact on asylum.

Tasks

—	Permanent support: supporting and stimulating the common quality of the asylum process through common training, a common asylum curriculum and common Country of Origin Information.

—	Special support: tailor-made assistance, capacity building, relocation, specific support and special quality-control processes.

—	Emergency support: organising solidarity for Member States confronted with particular pressures by providing temporary support and assistance to repair or to rebuild the asylum system.

—	Information and analysis support: sharing and merging information and data, analysis and assessment: not only comparing and sharing information, but also common trend analysis and common assessment.

—	Third country support: supporting the external dimension, supporting partnerships with third countries to reach common solutions, for example by capacity building and regional protection programmes, and coordinating Member States’ actions on resettlement.

Governance

Management Board

Composition

The EASO Management Board is composed of one member from each Member State except Denmark, two members from the European Commission and one non-voting member from the UNHCR. All members are appointed on the basis of their experience, professional responsibility and high degree of expertise in the asylum field.

Croatia was invited to attend all meetings of the Management Board and other relevant meetings as an observer until 1 July 2013, when it became a full member of EASO following the entry into force of the Treaty of Accession between the EU and Croatia of 9 December 2011.

Denmark, Iceland, Liechtenstein, Norway and Switzerland are invited to attend all meetings of the Management Board and other relevant meetings as observers.

Tasks

The key functions of the Management Board, as the governing and planning body of EASO, are outlined in Article 29 of the EASO Regulation and include the appointment of the Executive Director and the adoption of EASO’s work programmes and annual reports, and of EASO’s general budget. It has overall responsibility for ensuring that EASO performs its duties effectively.

Executive Director

The Executive Director, who is independent in the performance of his tasks, is the legal representative of the Office and is responsible, inter alia, for the administrative management of EASO and for the implementation of the work programme and the decisions of the Management Board. The Executive Director of EASO, Dr Robert K. Visser, took up office on 1 February 2011. His term of office is five years, renewable once for a further three years.

Consultative Forum

EASO has set up a Consultative Forum in accordance with Article 51 of the EASO Regulation. The Consultative Forum enables EASO to ensure close dialogue with civil society organisations and relevant competent bodies. The Consultative Forum constitutes a mechanism for the exchange of information and pooling of knowledge between EASO, civil society organisations and relevant bodies operating in the asylum field. In accordance with the EASO Regulation, the Consultative Forum meets in plenary at least once a year. In addition, EASO has an annual consultation calendar to organise its various consultation methodologies and activities, i.e. expert meetings, workshops, seminars and online consultation.

Internal audit

European Commission’s Internal Audit Service (IAS).

External audit

European Court of Auditors.

Discharge authority

European Parliament acting on a recommendation from the Council.

Resources made available to the Office in 2013

Final Budget

12 million euro

Staff as at 31 December 2013

Authorised posts (temporary staff): 45. Posts occupied: 44

Other posts (contract staff and SNEs): 32. Posts occupied: 27

Total posts: 77

Posts occupied: 71, by staff assigned to the following duties:

—	operational tasks: 43

—	administrative and support tasks: 28

Products and services in 2013

EASO’s activities can be divided into five focus areas: permanent support, special support, emergency support, information and analysis support and third country support.

Permanent support: With regards to training, EASO organised 13 train-the-trainer sessions, developed three new training modules and updated six modules already existing, developed two training handbooks and a training cockpit, designed a new learning path, organised the Annual Didactic Seminar, two training National Contact Points meetings and a meeting with the training reference group.

EASO’s work on quality of asylum processes and decisions included the development of the EASO quality matrix, the organisation of four thematic practical cooperation meetings and a meeting of the national contact points on quality.

With regards to Country of Origin Information (COI), EASO adopted the COI Network Approach, created three COI specific networks on Syria, Somalia and Pakistan, made available through the Common European COI Portal 2 108 new COI documents, organised two meetings of the National Common Portal Administrators, two meetings of the Strategic COI Network and ten country specific workshop and seminars. In addition, EASO produced a comparative analysis on the Western Balkans and delivered a training of the COI portal.

In the field of unaccompanied minors, EASO issued a publication entitled EASO age assessment practice in Europe, organised four practical cooperation meetings, an annual conference on unaccompanied minors and conducted a research on family tracing.

EASO updated the list of languages available for direct translation within the Member States, participated in relevant meetings of the JHA Agencies of trafficking in human beings and strengthen the cooperation with members of the Courts and Tribunals.

Special support: EASO provided special support to Sweden and to Italy. In case of Sweden, EASO delivered specific training on two EASO modules, while in the case of Italy, EASO contributed in the implementation of a Special Support Plan comprising 45 support activities. Twenty-five experts were deployed within ten support teams, delivering six thematic workshops on Dublin and COI, mapping the reception system of Italy and providing training to the Italian judiciary. In addition EASO organised two practical cooperation meetings on relocation, participated in the first Annual Relocation Forum and was involved in the Task Force Mediterranean, being eight actions earmarked for EASO.

Emergency support: EASO provided emergency support to Greece and to Bulgaria, deploying 49 experts within 25 Asylum Support Teams. An EASO-UNHCR project for Greece on processing of pending cases was implemented and an emergency exercise with Frontex in the Romanian and Hungarian border was conducted. EASO organised three meetings of the Asylum Intervention Pool National Contact Points.

Information and analysis support: EASO published its Annual Report on the state of asylum in the EU in 2012, three quarterly asylum reports and 12 monthly asylum reports. Moreover, EASO developed the stage II of its Early warning and Preparedness System.

Third country support: EASO adopted the External Action Strategy, participated in the Prague Process and in the EU Mobility Partnerships with Tunisia and Morocco and the dialogue on migration, mobility and security with Jordan. A project with these three countries was agreed in December 2013 in the context of the European Neighbourhood Partnership Instrument. Finally, EASO organised two practical cooperation meetings, one on resettlement and one on the external dimension of the CEAS and participated in two workshops of the Technical Assistance and Information Exchange (TAIEX) instrument.

With regard to EASO’s organisation, EASO organised four Management Board meetings, adopted three Management Board decisions, signed a working agreement with UNHCR and with FRA, held its third Consultative Forum meeting and consulted the civil society on various topics. EASO adopted its Multi-Annual Work Programme 2014-2016. Finally, an evaluation on the impact of EASO practical cooperation on asylum and on the CEAS was carried out by the European Commission in 2013.

Source: Annex supplied by the Office.

THE OFFICE’S REPLIES

11.	The accrual was a rough estimate and EASO was waiting for PMO’s confirmation of all entitlements to be received by the staff entered into service in 2013. EASO has currently a payroll tracking system (excel) to register all entitlements received or pending for each staff member.

12.

EASO late payments radically decreased by summer 2013; however due to a considerable increase in workload related to the year-end activities, late payments occurred again in the last quarter of 2013. New procedures such as mass upload payments have been put in place to decrease the rate of late payments.

13.	The implementation of the six pending internal control standards is on-going and they will be fully implemented in 2014.

14.	EASO acknowledges a significant improvement in its budgetary management in 2013 and will continuously monitor the consumption of budgetary commitments. This will ensure a high rate of budget execution and a regular carry-over.

15.	EASO has implemented a monthly monitoring and reporting system of established budgetary commitments in order to ensure timely de-commitments and limit the carry-forward to year n+1 to the amount necessary and sufficient to cover existing legal obligations.

16.

The questions for interviews and written tests are drafted based on the job requirements, as stated in the vacancy notice. The main reason for not drafting them prior to the preliminary meeting is to ensure their confidentiality.

For a number of criteria which are essential for a job, such as excellent planning and problem-solving skills, there is the risk of being unfair when assessing them through the application form. To increase transparency, EASO is mentioning all criteria that will be assessed during the interview under a specific paragraph of the vacancy notice. EASO complied with ECA’s comments and changed the conflict of interest statement for the Selection Committees. Furthermore, a policy on prevention and management of conflict of interests has been signed on 29 November 2013.

17.

Weightings and threshold scores are both set in advance before the examination of the applications. In accordance with the EASO Recruitment Policy, the threshold to be invited to the interviews and being put on the reserve list is 70 % and applies to all selection procedures. Furthermore, it is also stated in the Minutes of the selection procedures that the threshold is set in advance.

10.12.2014

Official Journal of the European Union

C 442/112

REPORT

on the annual accounts of the European Banking Authority for the financial year 2013, together with the Authority’s replies

(2014/C 442/13)

INTRODUCTION

The European Banking Authority (hereinafter ‘the Authority’, aka ‘EBA’), which is located in London, was established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council (1). The Authority’s task is to contribute to the establishment of high-quality common regulatory and supervisory standards and practices, to contribute to the consistent application of legally binding Union acts, to stimulate and facilitate the delegation of tasks and responsibilities among competent authorities, to monitor and assess market developments in the area of its competence and to foster depositor and investor protection (2).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of key controls of the Authority’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

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Authority, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013, and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Authority and the legality and regularity of the underlying transactions (5):

(a)

The management’s responsibilities in respect of the Authority's annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (6); making accounting estimates that are reasonable in the circumstances. The Director approves the annual accounts of the Authority after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the Authority in all material respects.

(b)

The auditor’s responsibility

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 Authority are free from material misstatement and the transactions underlying them are legal and regular.

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

In the Court’s opinion, the Authority’s annual accounts present fairly, in all material respects, its financial position as at 31 December 2013 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

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 are legal and regular in all material respects.

10.	The comments which follow do not call the Court’s opinions into question.

COMMENTS ON BUDGETARY MANAGEMENT

11.

In 2013, the overall level of committed appropriations was 90 % as compared to 89 % in 2012, varying between 87 % for title I (staff expenditure), 98 % for title II (administrative expenditure) and 92 % for title III (operational expenditure). The commitment rate for title I was negatively impacted by the Court of Justice’s decision against the indexation of staff salaries for the period 1 July 2011 to 30 June 2013 (1,8 million euro).

12.

Although the overall level of carry-overs decreased significantly to 3 8 76 564 euro (17 %) compared with 6 5 47 808 euro (36 %) for the previous year, carry-overs of committed appropriations remained relatively high for title II at 1 9 74 511 euro (35 %) and title III at 1 6 51 203 euro (36 %). These carry-overs mainly result from the planned procurement of IT infrastructure and IT services, for which the contracts were concluded as planned in December 2013 and the related services will be provided in 2014.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

13.

An overview of the corrective actions taken in response to the Court's comments from previous years is provided in Annex I.

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 1 July 2014.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

(1) OJ L 331, 15.12.2010, p. 12.

(2) Annex II summarises the Authority’s competences and activities. It is presented for information purposes.

(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).

(7) Article 107 of Regulation (EU) No 1271/2013.

ANNEX I

Follow-up of previous years’ comments

Year	Court's comment	Status of corrective action (Completed/Ongoing/Outstanding/N/A)
2011	The low budget execution rates show difficulties in budget planning and implementation.	Completed
2011	The Authority’s budget for the financial year 2011 was 12,7 million euro. In accordance with its Founding Regulation (1), 60 % of the 2011 budget was financed from Member States’ and EFTA countries’ contributions and 40 % from the Union budget. At the end of 2011, the Authority recorded a positive budget outturn of 3,6 million euro. In compliance with Articles 15(4) and 16(1) of its Financial Regulation the full amount was then recorded in the accounts as a liability towards the European Commission.	Completed
2011	The Authority needs to improve the transparency of recruitment procedures: weightings for selection criteria and threshold scores for being invited to interviews or for inclusion in the list of suitable candidates were not set before the examination of applications.	Completed
2012	In order to cover higher school fees, the Authority grants staff whose children attend primary or secondary school an education contribution in addition to the education allowances provided for in the Staff Regulations (2). Total 2012 education contributions amounted to some 76 000 euro. They are not covered by the Staff Regulations and therefore irregular.	Ongoing (3)
2012	In accordance with the Authority’s IT strategy which was drawn up by its predecessor organisation (4), the EBA’s IT core application systems were outsourced to an external IT provide (5) until December 2013. This poses risks related to the Authority’s limited control and supervision over its IT systems.	Completed
2012	The overall level of appropriations committed was 89 %, varying between 84 % for title I (staff expenditure), 86 % for title II (administrative expenditure) and 100 % for title III (operational expenditure) (6). Carry-overs of committed appropriations were high for title II (45 %) mainly for reasons beyond the Authority’s control, such as the unsuccessful attempt to find new premises and delays in the implementation of some IT projects for which it was difficult to obtain information needed from the predecessor organisation. For title III, carry-overs of committed appropriations were high (85 %), mainly due to the complexity and lengthy duration of two IT procurement procedures which however were carried out according to plan, delays in the launching and implementation of three other IT projects and the late invoicing for certain IT services by the suppliers.	N/A
2012	The Court identified the following weaknesses in the audited recruitment procedures affecting transparency and equal treatment: candidates were given a global score instead of one score for each of the selection criteria; there was no evidence that the questions for interviews and tests had been set before the date of the examinations.	Completed

(1) Article 62(1) of Regulation (EU) No 1093/2010 of the European Parliament and of the Countil of 24 November 2010.

(2) Article 3 of Annex VII provides for twice the basic allowance of 252,81 euro = 505,62 euro.

(3) For 3 of the 9 schools concerned contracts had yet to be concluded in 2013.

(4) Committee of European Banking Supervisors.

(5) Banque de France.

(6) Following an analysis of needs for the remaining part of the year, the budget was revised and appropriations were reduced by 8,9 % in September 2012.

ANNEX II

European Banking Authority (London)

Competences and activities

Areas of Union competence deriving from the Treaty

(Articles 26 and 114 of the Treaty on the Functioning of the European Union)

Article 26

‘1.	The Union shall adopt measures with the aim of establishing or ensuring the functioning of the internal market, in accordance with the relevant provisions of the Treaties.

2.	The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties.

3.	The Council, on a proposal from the Commission, shall determine the guidelines and conditions necessary to ensure balanced progress in all the sectors concerned.’

Article 114

‘1.

Save where otherwise provided in the Treaties, the following provisions shall apply for the achievement of the objectives set out in Article 26. The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.’

Competences of the Authority

(Regulation (EU) No 1093/2010 of the European Parliament and of the Council)

(Regulation (EU) No 1022/2013 of the European Parliament and of the Council, amending Regulation (EU) No 1093/2010)

Objectives

(a)	Improving the functioning of the internal market, including, in particular, a sound, effective and consistent level of regulation and supervision;

(b)	ensuring the integrity, transparency, efficiency and orderly functioning of financial markets;

(c)	strengthening international supervisory coordination;

(d)	preventing regulatory arbitrage and promoting equal conditions of competition;

(e)	ensuring the taking of credit and other risks are appropriately regulated and supervised;

(f)	enhancing customer protection.

Tasks

(a)	To contribute to the establishment of high-quality common regulatory and supervisory standards and practices;

(b)	to develop and maintain up to date a European supervisory handbook on the supervision of financial institutions in the Union as a whole;

(c)	to contribute to the consistent application of legally binding Union acts;

(d)	to facilitate the delegation of tasks and responsibilities among competent authorities;

(e)	to cooperate closely with the ESRB (1);

(f)	to organise and conduct peer review analyses of competent authorities;

(g)	to monitor and assess market developments in the area of its competence;

(h)	to undertake economic analyses of markets to inform the discharge of the Authority’s functions;

(i)	to foster depositor and investor protection;

(j)

to promote the consistent and coherent functioning of colleges of supervisors, the monitoring, assessment and measurement of systemic risk, the development and coordination of recovery and resolution plans, providing a high level of protection to depositors and investors throughout the Union and developing methods for the resolution of failing financial institutions and an assessment of the need for appropriate financing instruments;

(k)	to fulfil any other specific tasks set out in this Regulation or in other legislative acts;

(l)	to publish on its website, and to update regularly, information relating to its field of activities.

Governance

Board of Supervisors

Composed of the Chairperson, one representative per Member State (head of NSA (2)), Commission, ECB (3), ESRB, EIOPA (4) and ESMA (5).

Management Board

Composed of the Chairperson and six other members of the Board of Supervisors.

Chairperson

Appointed by Board of Supervisors.

Executive Director

Appointed by Board of Supervisors.

Board of Appeal

Joint body of the three ESAs.

External audit

European Court of Auditors.

Discharge authority

European Parliament.

Resources made available to the Authority in 2013 (2012)

2013 Budget

26,0(20,7) million euro

Including:

European Union subsidy: 10,4(8,3) million euro

Contributions from Member States: 15,2(12,1) million euro

Contributions from observers: 0,4(0,3) million euro

Posts filled as of 31 December 2013

93 temporary staff (68) — of which offer letters sent to and accepted by seven TAs before 31 December 2013.

14 contract staff (12)

17 Seconded National Experts (14)

Products and services 2013

—	Conduct of 56 public consultations (predominantly on draft Regulatory and Implementing Technical Standards developed under the CRDIV/CRR legislative framework), organisation of 34 public hearings

—

Submission of 36 draft Regulatory Technical Standards and 21 draft Implementing Technical Standards to the European Commission for final endorsement (developed in particular under (i) the CRDIV/CRR legislative framework, and relating to the area of banks’ own funds, credit risk, market risk, liquidity and remuneration, as well as (ii) the Crisis Recovery and Resolution legislative framework)

—

Issuance of two guidelines (on capital measures for FX lending, and on retail deposits subject to different outflows for the purpose of liquidity reporting) and four recommendations to national competent authorities (on banks’ participation in Euribor, on the development of recovery plans, on the preservation of CT1 capital during the transition to CRDIV/CRR legislative framework, and on asset quality review of banks)

—	Provision of six opinions addressed to the Commission, European Parliament and Council, one technical advice to the European Commission, four comment letters on accounting addressed to IASB and two comment letters on auditing addressed to IAASB

—	One peer review completed on the implementation by national competent authorities of the stress testing guidelines

—	Establishment of the Single Rulebook Questions and Answers tool on EBA website for institutions, supervisors and other stakeholders

—

Issuance of an extensive number of thematic reports in various areas of EBA expertise (e.g. banking sector and cross-sectoral risk analysis reports, reports on the consistency of banks’ risk-weighted assets, consumer trends report, report on the results of the Basel II monitoring exercise, end of term report of the Banking Stakeholder Group, reports on banks’ liquidity, report on the impact of the liquidity coverage ratio, report on the data on high earners in EU banks, report on comparability of supervisory rules and practices, report on procyclicality of banks’ capital requirements, reports in the area of comparability of the risk-weighted assets (RWAs), etc.)

—	Performance of risk analysis, assessment and monitoring of key risks in the EU banking sector, including analysis of the consistency of outcomes in RWAs, the sustainability of banks business models and reviews of banks’ asset quality

—	Development of semi-annual banking sector and cross-sectoral risk reports, quarterly risk dashboards, weekly reporting on liquidity and funding conditions of European banks and on banking market indicators, regular updates on risks and vulnerabilities provided to the EU institutions and bodies

—

Extensive work in the area of banks’ balance sheet repair and banks’ asset quality review (issuance of recommendations on the preservation of capital and on asset quality review, three interim reports on the consistency of RWAs, four other reports on various issues in relation to comparability of the RWAs, identification of common definitions of non-performing loans and forbearance, also in preparation for the asset quality reviews and the SSM comprehensive assessment)

—	Execution of the EU-wide transparency exercise providing information on EU banks that were part of the recapitalization exercise in 2012

—	Preparation for the 2014 stress testing of EU banks (work on development of methodologies, scenarios and key assumptions of the stress testing), inputs — as advisor to the Commission — to the stress tests in some program countries

—	Development and assistance with implementation of the common reporting frameworks of financial reporting (FINREP) and common reporting (COREP) and XBRL Taxonomy for second level supervisory reporting

—	Active participation in meetings and activities of colleges of national supervisory authorities, promoting and monitoring supervisory cooperation in colleges

—	Work related to EURIBOR and benchmark-related issues, performed jointly with ESMA, including publication of principles for benchmark setting processes, and work on follow up to recommendations to the Euribor-EBF and national authorities

—	Annual assessment on banks’ implementation of Pillar 3 disclosure requirements

—	Contribution to the Basel Committee’ Regulatory Consistency Assessment Programme (RCAP)

—

In the area of consumer protection, issuance of two consumer warnings (on virtual currencies and on contracts for difference), one joint position by the ESAs on product oversight and governance, co-organisation the 2013 Joint Consumer Day of the ESAs, and — as already mentioned under the above — issuance of three opinions on good practices for national competent authorities (on mortgages and exchange traded funds), one consumer trend report, and launch of one consultation on a draft RTS regarding mortgage intermediaries, and one consultation on joint complaints handling guidelines

—

Providing input and contribution to the process of the review of the European System of Financial Supervision in the context of Article 81 of the EBA Regulation, jointly with other ESAs (provision of quantitative and qualitative data to the COM, report on achievements and challenges of the ESAs to the Council, participation in the COM’s public hearing on the ESFS review and ECON’s public hearing, submission of the ESAs’ opinion on the review of the ESRB)

—	Provision and coordination of 20 seminars and training activities to staff from the EBA and national supervisory authorities (out of which eight provided jointly with the other ESAs)

—	10 meetings of Board of Supervisors (six physical meetings, four teleconferences), seven meetings of Management Board (five physical meetings, two teleconferences), seven meetings of the Banking Stakeholders Group (two of them jointly with the Board of Supervisors)

—	Fulfillment of the Establishment plan (61 selection procedures organised and 153 candidates interviewed in 2013 with no appeals to the ED or Ombudsman)

—	Further improvement of administration and transparency of recruitment, introduction of induction training for newly recruited staff

—	Definition and implementation of new procedure for administration of EBA education contribution (contracts with schools)

—	Introduction of new medical service provider (joint procurement with EMA) and of new interim staff provider following procurement procedure

—	In relation to Allegro, launching the work on development of eRecruitment, change to IBM platform, modification of Allegro to the new Staff Regulation

—	Procession of 421 financial commitments and 2 335 payment orders

—	Implementation of improved budget monitoring tools and of improvements in the Internal Control Standards

—	Successful completion of nine procurements, all fully in line with the EU procurement rules

—	Renewal of 20 contracts which initially had been signed in 2012 for a period of 12 months

—	Revision of the costing sheets in four contracts, according to the trend in the Retail Price Indices (RPI) covering the UK

—

Joining new Commission procedures for supply of office furniture, insurance services, IT services, licenses for computer software and Microsoft Licenses, and joined two inter-institutional procurement prcedures with the European Medicine Agency, for the provision of medical services and of interim staff (legal profile).

(1) European Systemic Risk Board.

(2) National Supervisory Authority.

(3) European Central Bank.

(4) European Insurance and Occupational Pensions Authority.

(5) European Securities and Markets Authority.

Source: Annex supplied by the Authority.

THE AUTHORITY’S REPLIES

11.

The EBA adopted a prudent approach to the 2011/2012 salary adjustments which, due to the form and timing of the Court of Justice decision, resulted in commitment execution of just over 90 %. The authority anticipates significantly improved budget execution in 2014, given ongoing improvement in budget management by the authority and taking account of the greater clarity regarding the salary adjustments.

12.

The EBA acknowledges that, while there has been a significant decrease in the overall level of carry-overs, there is still room for further improvement. Given that the bulk of the carry-overs arises due to the timing of various annually renewable IT contracts, the EBA intends within the calendar year to pursue options to amend supplier contracts so as to change renewal periods and so reduce the level of carry-over.

10.12.2014

Official Journal of the European Union

C 442/123

REPORT

on the annual accounts of the European Centre for Disease Prevention and Control for the financial year 2013, together with the Centre’s replies

(2014/C 442/14)

INTRODUCTION

The European Centre for Disease Prevention and Control (hereinafter ‘the Centre’, aka ‘ECDC’), which is located in Stockholm, was established by Regulation (EC) No 851/2004 of the European Parliament and of the Council (1). The Centre’s main tasks are to collect and disseminate data on the prevention and control of human diseases and to provide scientific opinions on this subject. It is also required to coordinate the European network of bodies operating in this field (2).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Centre, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013; and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Centre and the legality and regularity of the underlying transactions (5):

(a)

(b)

The auditor’s responsibility

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

Opinion on the legality and regularity of the transactions underlying the accounts

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 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.

Although the Centre has improved its management of procurement procedures, for one procedure launched in 2013 there was conflicting information between the contract notice and the tender specifications which may have affected the competitive process and the outcome of the procedure. Payments made in 2013 under the framework contract and the two specific contracts concerned amounted to 1 08 000 euro. Following the Court’s audit, the Centre took immediate corrective action and the framework contract was cancelled.

COMMENTS ON BUDGETARY MANAGEMENT

12.

The overall budget execution rate was relatively low (92 %). Cancellations of 2013 appropriations appeared in all budget titles.

13.

Carry-overs of committed appropriations were relatively high, with 1 7 14 484 euro (26 %) for Title II (administrative expenditure) and 7 9 07 139 euro (44 %) for Title III (operational expenditure).

14.

For Title II, this mainly related to procurement of IT hardware and software (1 0 86 203 euro), and the ongoing external evaluation of the Centre (2 10 000 euro).

15.

For Title III, committed appropriations carried over mainly concerned multiannual projects (4 6 20 605 euro), and IT items to support operational activities (1 9 62 443 euro) for which activities were implemented and payments were made according to operational needs. However, weaknesses were noted in respect of the budgetary planning and execution for operational meetings, mainly due to overestimated attendance levels and hotel and flight costs. For the respective budget line, 29 % of 2013 appropriations (6 55 142 euro) and 59 % of carry-overs from 2012 (4 55 820 euro) were cancelled. In addition, 38 % of committed 2013 appropriations for operational meetings (amounting to 5 94 758 euro) were carried over to 2014.

FOLLOW-UP OF PREVIOUS YEAR’S COMMENTS

16.

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 142, 30.4.2004, p. 1.

(2) Annex II summarises the Centre’s competences and activities. It is presented for information purposes.

(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).

(7) Article 107 of Regulation (EU) No 1271/2013.

ANNEX I

Follow-up of previous years’ comments

Year	Court’s comment	Status of corrective action (Completed/Ongoing/Outstanding/N/A)
2012	The opinion on the legality and regularity of the Centre’s transactions was qualified for the year 2011 because the Centre did not respect the maximum amount of a framework contract from 2009. According to this framework contract, the Centre could sign specific contracts with selected suppliers up to a maximum amount of 9 million euro. By the end of 2011 however, payments of 12,2 million euro had been made. In order to purchase essential services for the continuation of the related project, the Centre in 2012 concluded additional specific contracts for an amount of 2,5 million euro. Together with 2,7 million euro of payments made in 2012 for contracts signed already in 2011, payments made totalled 17,4 million euro by the end of 2012. Whilst payments above the 9 million euro ceiling set in the framework contract are irregular, the Centre has taken corrective action in 2012 and signed a replacement framework contract in June 2012 (no further payments will be made under the old contract) and has improved monitoring the consumption of framework contracts in general.	N/A
	The 2012 payments amounting to 5,2 million euro stem from failures in previous years when the ceiling of the framework contract was not respected. They relate to contractual obligations stemming from previous years (2,7 million euro) or taken in 2012 for business continuity reasons (2,5 million euro) pending the finalisation of the procurement procedure for the new framework contract. Given the corrective action taken by the Centre in 2012, the Court has not qualified the opinion on the legality and regularity of transactions this year.
2012	In 2012, the Centre awarded grants to research institutions and individuals. Total grant expenditure amounted to 7 52 000 euro, representing 1,4 % of 2012 operating expenditure. The Centre’s ex ante verifications before reimbursement of costs claimed by beneficiaries consist of a desk analysis of cost claims and partly also of audit certificates issued by independent audit firms contracted by the beneficiaries. The Centre does not usually obtain from beneficiaries any documents to substantiate the eligibility and accuracy of the costs claimed. In order to strengthen controls, the Centre has adopted an ex post verification strategy and planned for its implementation in 2012. However, it experienced a 10-month delay in gaining access to an interinstitutional audit contract and, at the time of the audit, no ex post verifications of 2012 grant expenditure had yet taken place. For the transactions audited by the Court, supporting documentation was obtained by the Centre on the Court’s behalf which provided reasonable assurance as to their legality and regularity.	Ongoing
2012	Budget implementation rates were satisfactory for Title I (staff expenditure) and Title II (administrative expenditure) at 97 % and 80 % of committed appropriations respectively. While the level of carry-overs related to Title III is high at 8,3 million euro (41 % of Title III appropriations committed), this did not arise from delays in the implementation of the Centre’s annual work programme, but reflects the multiannual nature of activities. The Centre has adopted a budgetary planning module that is linked directly to its annual work programme and payments were planned and made according to operational needs.	N/A

ANNEX II

European Centre for Disease Prevention and Control (Stockholm)

Competences and activities

Areas of Union competence deriving from the Treaty

(Article 168 of the Treaty on the Functioning of the European Union)

‘A high level of human health protection shall be ensured in the definition and implementation of all Union policies and activities.’

‘Union action, which shall complement national policies, shall be directed towards improving public health, preventing physical and mental illness and diseases, and obviating sources of danger to physical and mental health. Such action shall cover the fight against the major health scourges, by promoting research into their causes, their transmission and their prevention, as well as health information and education, and monitoring, early warning of and combating serious cross-border threats to health.’

Competences of the Centre

(Regulation (EC) No 851/2004 of the European Parliament and of the Council)

Objectives

—	To strengthen Europe’s defences against infectious diseases; specifically, to identify, assess and communicate current and emerging threats to human health from communicable diseases.

—	To this end, the Centre operates dedicated surveillance networks, provides scientific opinions, operates the early warning and response system (EWRS) and provides scientific and technical assistance and training.

Tasks

—	To operate dedicated disease surveillance networks and enhance networking activities. The Centre has a specific role in data collection, validation, analysis and dissemination.

—	To provide authoritative expert advice and scientific opinions and studies on communicable diseases.

—	To operate the Early Warning and Response System. Develop procedures for identifying emerging health threats.

—	To strengthen Member States’’ capacity in preparedness planning and in training.

—	To keep the general public and interested parties informed about its work.

Governance

Management Board

Composition

One member designated by each Member State, two members designated by the European Parliament and three representatives of the Commission.

Tasks

The Board adopts the Centre's annual programme and budget and monitors their implementation.

Director

Appointed by the Management Board on the basis of a list of candidates proposed by the Commission.

Advisory Forum

Composition

A representative of each Member State and three non-voting representatives of the Commission.

Tasks

The Forum is to assure the scientific excellence of the work and the independence of the activities and opinions of the Centre.

External audit

European Court of Auditors.

Internal audit

European Commission's Internal Audit Service (IAS).

Discharge authority

European Parliament acting on the recommendation of the Council.

Resources made available to the Centre in 2013 (2012)

Final Budget

58,3(58,2) million euro

Staff as at 31 December 2013

Posts in establishment plan: 198 (200)

Occupied posts: 190 (187)

Other posts: 0 (0)

Total staff: 41 (47) assigned to the following duties:

—	operational tasks: 25 (26)

—	administrative and support tasks: 16 (21)

Products and services in 2013

—	Organization of four EIT Forum meetings with KICs (a platform created to establish regular dialogue between the Director of the Institute and the KIC CEOs) and a Spring Workshop with KICs and EIT Governing Board.

—

Decision of the Governing Board on the 5 December 2013 for the allocation in the year 2014 of a total of 180 million euro budget to the funding of KIC Value Added Activities for the three KICs after the implementation of a process of Competitive Funding corresponding to 36 % of the overall budget. The Governing Board also decided to defer a supplementary budget allocation to the KICs of 40 million euro for 2014 to be allocated separately and equally split on the basis, inter alia, of the follow-up of strategic recommendations.

—	The three KICs have managed in the year 2013 a total budget of 12 5 6 15 015 euro for EIT funding of KIC Value Added Activities and a budget of 75 0 5 35 096 euro for non-EIT Funding of KAVA activities and complementary activities.

—	The total number of KIC partners involved in the three KICs in 2013 reached a maximum of 487 organisations from Climate-KIC (187), EIT ICT Labs (105), and KIC InnoEnergy (195).

—

In 2013, KICs provided EIT with 6 consolidated Key Performance Indicators and their respective supporting documents for the year 2012; they were assessed and validated by EIT, as part of the KICs past performance assessment in view of the competitive funding process for the 2014 allocation. The KICs also provided EIT with estimates for their 2013 Key Performance Indicators.

—	Organisation of ‘Fostering Innovation and Strengthening Synergies within the EU’ Conference in Dublin, Ireland on 29 and 30 April 2013 under the auspices of the Irish Presidency of the Council of the European Union.

—	Publication of ‘Analysis of Synergies fostered by the EIT in the EU Innovation Landscape’ study.

—	Roundtable of Entrepreneurs on the topic ‘Matching Entrepreneurship with Venture Capital’ was organised from July 11 to 13 in Grundlsee, Austria.

—	Launch of the EIT Alumni Community on 11 November in Budapest, Hungary.

—	2013 EIT Awards with three winners of the EIT Venture Award and three winners of the new EIT CH.A.N.G.E. Awards on 12 November in Budapest, Hungary.

—	Dissemination of a larger number of success stories derived from the implementation of KIC activities.

Source: Annex supplied by the Institute.

THE INSTITUTE’S REPLIES

The EIT welcomes the acknowledgement by the Court of Auditors concerning the considerable efforts made by EIT to implement effective ex ante verifications with the aim to obtain reasonable assurance on the legality and regularity of grant transactions. The EIT is committed to further improve the instructions provided to certifying auditors in order to remedy the weaknesses identified by the Court of Auditors and to increase the level of assurance obtained from audit certificates.

10.

In accordance with the ex-post audit strategy of the EIT, KIC Partners to be audited are selected primarily on the basis of a risk assessment for maximum efficiency of limited resources. However, in order to be in a position to provide a representative error rate, the EIT selects part of the sample on a random basis. This ensures a more balanced coverage of KIC Partners over the duration of the Framework Partnership Agreements. As regards Grant Agreements 2012, while the overall error rate was indeed 3 % of the audited grants, as reported by the Court of Auditors, the detected error rate in the random sample was only 1,37 %. The detected error rate of 3,29 % in the risk-based sample is by definition not representative for the overall population. As the representative error rate of 1,37 % remained below the materiality threshold of 2 %, the EIT did not make a reservation in the Annual Activity Report and considers that grants paid under Grant Agreements 2012 are free from material errors.

11.

The EIT has taken a proactive approach in order to launch immediate mitigating actions in the area of procurement as follows. 1) Extensive revision of the internal procedures, circuits and templates to fully comply with the respective public procurement rules, with special attention to the sound planning and estimation of needs. 2) In order to ensure the provision of the necessary services, the EIT has started to use the available Commission framework contracts and has launched procurement procedures to award new service contracts. 3) The EIT has planned a series of trainings for EIT staff on procurement. The EIT is committed to implement mitigating measures in order to avoid procurement procedural errors in the future.

12.

According to the EIT’s calculation, based on the methodology of the Court of Auditors, the combined error rate for 2013 expenditure was 2,12 %. While this error rate is indeed in the range reported by the Court of Auditors, it is important to note that the level of financial errors in grants (i.e. representative error rate of 1,37 %) was well below the materiality threshold of 2 %. Furthermore, the EIT is committed to improve its internal procedures to avoid future procurement procedural errors.

15.

The EIT will obtain audit certificates on costs of KIC complementary activities in the first quarter of 2015 and compliance with the 25 % ceiling set out in the Framework Partnership Agreements will be verified on the basis of final figures in the first half of 2015. If the 25 % ceiling is not met, the corresponding amount will be recovered from the KIC(s) in accordance with the provisions of the Framework Partnership Agreement. Such a recovery will be reflected in the annual accounts of the EIT for the financial year 2014.

16.

The EIT welcomes the acknowledgement by the Court of Auditors concerning the budget execution. The overall implementation rate of commitment appropriations for title 1 (staff expenditure) was 84 %. While it is true that the implementation rate of EU contribution was 74 %, as reported by the Court of Auditors, it is important to note that 100 % of Host Member State contribution was implemented. The non-executed part of staff expenditure relates to high staff turnover and the appropriations earmarked for salary adjustments for the years 2011 and 2012, for which the European Court of Justice eventually made a ruling that prevented such adjustments to be paid before year-end.

17.

The EIT acknowledges the comments of the Court of Auditors on the execution of carry-overs on title 2 (administrative expenditure). Non-execution of appropriations carried over from 2012 to 2013 under this title was largely due to overestimated costs for a Governing Board meeting of December 2012, more specifically, the actual costs turned out to be lower than the estimates.

18.	The EIT acknowledges the comments of the Court of Auditors on the execution of commitments for 2012 KIC grants carried over from 2012 to 2013.

10.12.2014

Official Journal of the European Union

C 442/193

REPORT

on the annual accounts of the European Medicines Agency for the financial year 2013, together with the Agency’s reply

(2014/C 442/22)

INTRODUCTION

The European Medicines Agency (hereinafter ‘the Agency’, aka ‘EMA’), which is located in London, was established by Council Regulation (EEC) No 2309/93, which was replaced by Regulation (EC) No 726/2004 of the European Parliament and of the Council (1). The Agency operates through a network and coordinates the scientific resources made available by the national authorities in order to ensure the evaluation and supervision of medicinal products for human or veterinary use (2).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Agency, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013, and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Agency and the legality and regularity of the underlying transactions (5):

(a)

(b)

The auditor’s responsibility

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 Agency are free from material misstatement and the transactions underlying them are legal and regular.

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

Opinion on the legality and regularity of the transactions underlying the accounts

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 are legal and regular in all material respects.

10.	The comments which follow do not call the Court’s opinions into question.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

11.

An overview of the corrective actions taken in response to the Court's comments from previous years is provided in Annex I.

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 1 July 2014.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

(1) OJ L 214, 24.8.1993, p. 1 and OJ L 136, 30.4.2004, p. 1. In accordance with the latter Regulation, the Agency’s original name, the European Agency for the Evaluation of Medicinal Products, was changed to the European Medicines Agency.

(2) Annex II summarises the Agency’s competences and activities. It is presented for information purposes.

(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).

(7) Article 107 of Regulation (EU) No 1271/2013.

ANNEX I

Follow-up of previous years’ comments

Year	Court's comment	Status of corrective action (Completed/Ongoing/Outstanding/N/A)
2011	There is scope for improving the transparency of procurement procedures.	Completed
2011	The Court identified a need to improve the transparency of staff selection procedures. Selection Board members did not always complete their conflict of interest declarations, or did not do so in a timely manner, and there was no evidence of any action taken to address the issues raised by these declarations. The documentation of the Selection Board’s proceedings was not always adequate and there is no evidence as to how the method for the short-listing of candidates was established and that the questions for the written tests or interviews were set before the examinations.	Completed
2012	The Agency applies differing recognition criteria for fee revenue and associated expenditure. Revenue from application fees is recognised on a straight-line basis over a set time period. Expenditure for the evaluation of such applications by the competent national authorities is however accrued when a specific milestone in service delivery is reached. This is in contradiction with the matching principle.	Completed
2012	The Agency has not yet validated its accounting system in the area of intangible fixed assets. Given the considerable investment in the ICT development (1), this is a crucial part of the whole accounting system.	Completed
2012	In 2011 and 2012, the Council refused salary increases for EU staff. The Commission appealed this decision to the Court of Justice which did not yet rule on the matter. Since the Agency is located in London, the salary increases in question will be paid in GBP whereas the Agency’s accounts are prepared in Euros. Given the fluctuations in the exchange rate over the period concerned, the possible back pay to staff would lead to an estimated exchange rate loss for the Agency of 2,9 million euro. The Agency has included this amount in the calculation of its budgetary outturn account, leading to an equivalent understatement of funds to be paid back to the Commission (2).	N/A
2012	In 2012, the Agency issued cascading framework contracts for the provision of services (3). The procurement procedure presented some irregularities affecting the principle of transparency.	N/A
2012	In addition to the education allowances provided for in the Staff Regulations (4), the Agency pays education contributions directly to schools for staff whose children attend primary or secondary school without having contracts with schools in place. Total 2012 education contributions amounted to some 3 89 000 euro. Such expenditure is not covered by the Staff Regulations and irregular.	Ongoing (5)
2012	The Agency’s budget implementation rates for the year 2012 were satisfactory for titles I and III. While the rate of committed appropriations carried over was high for title II at 27 %, this primarily relates to the Agency’s planned move to new premises in 2014 (4 2 05 000 euro) and the development of ICT systems (1 5 96 000 euro). While the latter is of a multiannual nature that can partly justify the carry-overs, the Agency’s ICT Unit was significantly reorganised in 2012 and a number of projects planned for 2012 were delayed.	N/A

(1) 2012 investments in ICT development amounted to 1 1 6 25 000 euro.

(2) In so doing, the Agency followed an instruction from the Commission dated December 2012 which however was further clarified in June 2013.

(3) By 31 December 2012, total budgetary commitments of 1 3 4 75 000 euro had been made for specific contracts under these framework contracts, and payments of 4 6 90 000 euro had been made.

(4) Article 3 of Annex VII provides for twice the basic allowance of 252,81 euro = 505,62 euro.

(5) A new procedure was prepared in 2013 and will enter into force in 2014.

ANNEX II

European Medicines Agency (London)

Competences and activities

Areas of Union competence deriving from the Treaty

(Article 168 of the Treaty on the Functioning of the European Union)

Collection of information

A high level of human health protection shall be ensured in the definition and implementation of all Union policies and activities.

Union action, which shall complement national policies, shall be directed towards improving public health, preventing physical and mental illness and diseases, and obviating sources of danger to physical and mental health. Such action shall cover the fight against the major health scourges, by promoting research into their causes, their transmission and their prevention, as well as health information and education, and monitoring, early warning of and combating serious cross-border threats to health.

Competences of the Agency

(Regulation (EC) No 726/2004 of the European Parliament and of the Council)

Objectives

—	To coordinate the scientific resources that the Member States’ authorities make available to the Agency for the authorisation and supervision of medicinal products for human and veterinary use,

—	to provide the Member States and the institutions of the European Union with scientific advice on medicinal products for human or veterinary use.

Tasks

—	To coordinate the scientific evaluation of medicinal products which are subject to Union marketing authorisation procedures,

—	to coordinate the supervision of medicinal products which have been authorised within the Union (Pharmacovigilance),

—	to advise on the maximum limits for residues of veterinary medicinal products which may be accepted in foodstuffs of animal origin,

—	to coordinate verification of compliance with the principles of good manufacturing practice, good laboratory practice and good clinical practice,

—	to record the status of marketing authorisations granted for medicinal products.

Governance

The Committee for Medicinal Products for Human Use (CHMP) is responsible for preparing the Agency's opinions on all questions concerning medicines for human use. The CHMP consists of one member and one alternate from each Member State, one member and an alternate nominated by Iceland and by Norway and up to five co-opted members.

The Committee for Medicinal Products for Veterinary Use (CVMP) is responsible for preparing the Agency's opinions on all questions concerning veterinary medicines. The CVMP consists of one member and one alternate from each Member State, Iceland and Norway and up to five co-opted members.

The Committee on Orphan Medicinal Products (COMP) is responsible for reviewing applications from people or companies seeking orphan medicinal product designation. The COMP consists of one member from each Member State, three members nominated by the European Commission representing patients’ organisations, three members nominated by the European Commission on the Agency’s recommendation, one member nominated by Iceland, one by Liechtenstein and one by Norway, and one European Commission representative.

The Committee on Herbal Medicinal Products (HMPC) is responsible for preparing the Agency’s opinions on herbal medicines. The HMPC consists of one member and one alternate from each Member State, Iceland and Norway, and up to five co-opted members.

The Paediatric Committee (PDCO) is responsible for assessing the content of applications: for paediatric investigation plans, with or without request of deferral(s) and/or partial waivers; for modification of a previously agreed paediatric investigation plan; for product-specific waivers and for compliance checks. The PDCO consists of five members of the CHMP and their five alternates, one member and one alternate from each Member State which is not represented by the five above, and six members and alternates appointed by the European Commission representing healthcare professionals and patients’ associations.

The Committee for Advanced Therapy (CAT) is responsible for assessing the quality, safety and efficacy of advanced therapy medicinal products (ATMPs) and following scientific developments in the field. The CAT consists of five members of the CHMP and their five alternates, one member and one alternate from each Member State which is not represented by the five above, and four members and four alternates appointed by the European Commission representing patients’ associations and clinicians.

The Pharmacovigilance Risk Assessment Committee (PRAC) is responsible for assessing and monitoring safety issues for human medicines. The PRAC consists of one member and one alternate from each Member State, Iceland and Norway, six independent scientific experts nominated by the European Commission and two members and two alternates nominated by the European Commission to represent healthcare professionals and patients’ organisations

The Management Board consists of one member and one alternate from each Member State, two representatives of the Commission, two representatives of the European Parliament and two representatives from patients' organisations, one representative from doctors' organisations and one representative from veterinarians' organisations. The Board adopts the work programme and the annual report.

The Executive Director is appointed by the Management Board on a proposal from the Commission.

Internal audit

Commission’s Internal Audit Service (IAS)

EMA Internal Audit Capability (IAC)

External audit

European Court of Auditors

Discharge authority

European Parliament, acting on a recommendation from the Council

Resources made available to the Agency in 2013 (2012)

Final Budget

251,560(222,489) million euro (1); Union contribution: 13,0 % (9,6 %) (2)

Staff as at 31 December 2013

611 (590) in the establishment plan, of which occupied: 583 (575)

144 (160) other staff (contract staff, seconded national experts, employment agency staff)

Total staff: 727 (735), undertaking the following tasks: operational: 590 (594), administrative 137 (141)

Products and services in 2013 (2012)

Medicinal Products for Human Use

—	Applications for marketing authorisations: 80 (96)

—	Favourable opinions: 80 (57)

—	Average evaluation time: 200 (188) days

—	Opinions after authorisation: 5 447(5 137)

—	Pharmacovigilance (CAP EEA and non-EEA ADR reports): 6 79 413(5 22 073) reports

—	Periodic safety update reports: 525 (463)

—	Scientific advice finalised: 474 (420)

—	Mutual Recognition Procedures and Decentralised Procedures: started 6 293(6 991); ended 6 242(6 709)

—	Applications for paediatric investigation plans: 211 (178) relating to 225 (218) indications

Medicinal Products for Veterinary Use

—	Applications for marketing authorisations: 23 (13)

—	Applications in respect of variants: 315 (261)

Inspections

Inspections: 480 (450)

Herbal Medicinal Products

Herbal monographs: 9 (15)

List of herbal substances, preparations and combinations thereof: 0 (0)

Orphan Medicinal Products

—	Applications: 201 (197)

—	Favourable opinions: 136 (139)

SMEs

—	Requests for SME status 401 (684)

—	Applications for fee reduction or deferrals 336 (316)

(1) This is the final budget, not the actual total of the budgetary outturn account.

(2) This is the percentage of the budgeted EU contribution (excluding special contribution for orphan fee reductions and excluding the use of surplus n-2) in relation to the final budget.

Source: Annex supplied by the Agency.

THE AGENCY’S REPLY

The European Medicines Agency has taken note of the Court of Auditors’ report.

10.12.2014

Official Journal of the European Union

C 442/201

REPORT

on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the financial year 2013, together with the Centre’s replies

(2014/C 442/23)

INTRODUCTION

The European Monitoring Centre for Drugs and Drug Addiction (hereinafter ‘the Centre’, aka ‘EMCDDA’), which is located in Lisbon, was established by Council Regulation (EEC) No 302/93 (1). Its main task is to collect, analyse and disseminate information as regards drugs and drug addiction in order to prepare and publish information at European level that is objective, reliable and comparable. The information is intended to provide a basis for analysing the demand for drugs and ways of reducing it, as well as, in general, phenomena associated with the drug market (2).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Centre, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013; and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Centre and the legality and regularity of the underlying transactions (5):

(a)

(b)

The auditor’s responsibility

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

Opinion on the legality and regularity of the transactions underlying the accounts

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 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 Centre launched a procurement procedure to rent photocopying machines over a four-year period for a maximum amount of 1 60 000 euro. The technical requirements were subject to a significant modification during the procedure. Following this modification, an amended contract notice was published extending the deadline for the submission of tenders, but there was no clear indication of the changes in the technical requirements. The latter were again adjusted for the conclusion of the contract, in accordance with the option announced in the published specifications, leading to a decrease in the contract value by 35 %. The information published on the contract’s price structure was not sufficiently clear and this led to a misinterpretation by one bidder, who therefore had lower chances to win the procedure. In addition, the evaluation criteria were not sufficiently specific to ensure full transparency and equal treatment of bidders. The above referred weaknesses affected the efficiency and effectiveness of this procurement procedure and created a risk of hampering competition.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

12.

An overview of the corrective actions taken in response to the Court's comments from previous years is provided in Annex I.

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 22 July 2014.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

(1) OJ L 36, 12.2.1993, p. 1. This Regulation and its amendments were repealed by Regulation (EC) No 1920/2006 of the European Parliament and of the Council (OJ L 376, 27.12.2006, p. 1).

(2) Annex II summarises the Centre’s competences and activities. It is presented for information purposes.

(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).

(7) Article 107 of Regulation (EU) No 1271/2013.

ANNEX I

Follow-up of previous years’ comments

Year	Court's comment	Status of corrective action (Completed/Ongoing/Outstanding/N/A)
2011	The Centre currently bears the annual cost of about 2 75 000 euro for unused office space in its former building and in the new Headquarters. The Centre should continue, in cooperation with the European Commission and National Authorities, to seek adequate solutions for the unused office space.	Ongoing
2011	The Centre’s procurement files were not always complete and adequately organised.	Completed
2012	In 2012, the Centre gave grants to Member States’ national drug monitoring centres (beneficiaries) in order to support cooperation under the REITOX network (1). Total grant expenditure in 2012 was 2,6 million euro, representing 16 % of total operating expenditure. The Centre’s ex ante verifications before reimbursement of costs claimed by beneficiaries consist of a desk analysis of cost claims and of audit certificates issued by external auditors contracted by the beneficiaries. The Centre does not usually obtain from beneficiaries any documents to substantiate the eligibility and accuracy of the costs claimed. Ex post on-the-spot verifications of costs at beneficiary level are rare (2). Existing controls therefore provide only limited assurance to the Centre’s management as to the eligibility and accuracy of the costs claimed by beneficiaries. For the transactions audited by the Court supporting documentation was obtained by the Centre on the Court’s behalf which provided reasonable assurance as to their legality and regularity. A random verification of supporting documents and a higher coverage of beneficiaries by on-the-spot verifications could considerably increase assurance.	Ongoing
2012	No ex post verifications were carried out for any transactions made after 2008, except for grants	Ongoing
2012	The Centre had not yet adopted Business Continuity or Disaster Recovery Plans.	Completed
2012	The Centre currently bears the annual cost of about 2 00 000 euro for unused office space in its former building and in the new Headquarters. The Centre should continue, in cooperation with the Commission and National Authorities, to seek adequate solutions for this unused office space.	Ongoing

(1) Under the European Information Network on Drugs and Drug Addiction (REITOX) the Centre collects country data on drugs from national drug monitoring centres.

(2) In 2011, two ex post verifications were carried out in two Member States. No such verifications took place in 2012.

ANNEX II

European Monitoring Centre for Drugs and Drug Addiction (Lisbon)

Competences and activities

Areas of Union competence deriving from the Treaty

(Articles 168 and 114 of the Treaty on the Functioning of the European Union)

The Union shall complement the Member States’ action in reducing drugs-related health damage, including information and prevention.

Competences of the Centre

(Regulation (EC) No 1920/2006 of the European Parliament and of the Council)

Objectives

To provide the Union and its Member States with factual, objective, reliable and comparable information at Union level concerning drugs, drug addiction and their consequences.

The Monitoring Centre is to focus on the following priority areas:

(1)	monitoring the state of the drugs problem and emerging trends, in particular those involving multi-drug use;

(2)	monitoring the solutions and providing information on best practices;

(3)	assessing the risks of new psychoactive substances and maintaining a rapid information system;

(4)	developing tools and instruments to help Member States to monitor and evaluate their national policies and the Commission to monitor and evaluate Union policies.

Tasks

—	To collect and analyse data,

—	to improve data-comparison methods,

—	to disseminate data,

—	to cooperate with European and international bodies and organisations and with countries outside the Union,

—	to identify new developments and changing trends.

Governance

Management Board

Comprises one representative from each Member State, two representatives from the Commission and two independent experts, designated by the European Parliament, who are particularly knowledgeable in the field of drugs.

The Management Board adopts the work programme, the general activities report and the budget, and gives an opinion on the final accounts.

Executive Committee

Composition

Chairperson of the Management Board

Vice-Chairperson of the Management Board

Two other elected members from the Management Board representing the Member States

Two representatives from the Commission

Director

Appointed by the Management Board on a proposal by the Commission.

Scientific Committee

Delivers opinions. It consists of, at most, fifteen well-known scientists appointed in view of their excellence by the Management Board following a call for expressions of interest. The Management Board may also appoint a panel of experts to the extended Scientific Committee for the risk assessment of new psychoactive substances.

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.

Resources made available to the Centre in 2013 (2012)

Budget

16,31(16,32) million euro. Union subsidy: 95,4 % (95,3 %).

Staff at 31 December 2013

Number of posts in establishment plan: 84 (84)

Posts occupied: 76 (79) + 24 (25) other staff (seconded national experts, contract staff and temporary replacements)

Total staff: 100 (104)

Allocated to the following tasks:

—	operational: 61 (64,5)

—	administrative and IT support: 28,5(29)

—	mixed: 10,5 (10,5)

Products and services 2013 (2012)

Network

The Centre runs a computerised network for the collection and exchange of information called the ‘European Information Network on Drugs and Drug Addiction’ (Reitox); this network connects national drug information networks, specialist centres in the Member States and the information systems of international organisations working with the Centre.

Publications

2013 was the first year of the 2013-15 EMCDDA strategy and work programme and the first year of implementation of the new communication strategy adopted by the Management Board in July 2012, together with the three-year work programme. In accordance with this strategy, some product lines were streamlined and others were redesigned. There is therefore no strict correspondence between the 2013 products and those of 2012.

—	European Drug Report — Trends and developments (23 language versions) publication and interactive website (Annual report on the state of the drug problem in Europe; 22 language versions, publication and interactive website)

—	Perspectives on drugs (PODs) — 11 (0), EN, interactive website

—	Selected issues — 0 (2), EN

—	Statistical bulletin and interactive website containing over 350 (350) tables and 100 (100) graphs

—	General report of activities — annual, EN

—	Drugnet Europe newsletter — four issues, EN (4)

—	Drugs in focus (policy briefings) — 0 (1)

—	Centre Scientific Monograph — 0 (0), EN

—	Centre Insights — 1 (3), EN

—	Manuals — 1 (2), EN

—	Centre thematic papers — 2 (8)

—	EMCDDA Papers — 4 (0), EN

—	Policy profiles — 1 (0), EN

—	Joint publications — 1 (2): EN

—	Outputs linked to the implementation of the Council Decision on new psychoactive substances (2005/387/JHA) — 2 (2), EN

—	Drug profiles — 0 new (0) and zero updated (0)

—	Technical and scientific studies, including articles and scientific summaries 28 (23)

—	Ad hoc publications — 1 (3), EN

—	Brochures — 1 (1), EN

—	Work programmes and strategies — 3 (2), EN

—	Data collection, validation, storage and retrieval system (Fonte)

Other websites

Reorganisation/updating/content development of public Centre website including:

—	Country overviews

—	Drug treatment overviews, health and social responses profiles, prevention profiles

—	European legal database on drugs

—	Evaluation instruments bank

—	Best practice portal (exchange on drug demand reduction action, harm reduction and treatment modules)

—	Topic pages

—	Publications database

Promotional material

Conference materials: 4 EN (2)

Media products: 12 (13) news releases and 13 (10) fact sheets, EN

Participation in international conferences, technical and scientific meetings: 285 (266).

Source: Annex supplied by the Centre.

THE CENTRE’S REPLIES

11.

The referred modification of the technical specifications was intended to update the Centre’s capacity/speed for copying/printing. The relevant contract notice was duly published via the information system for European public procurement (SIMAP). This system imposes some restrictions to the information that can be published on the terms and content of changes to the initial publication.

The published technical specifications, along with the draft contract attached to these specifications, explicitly gave the option of adjusting the number and combination of the equipment to be provided by the winning tenderer/contractor, depending on the EMCDDA’s actual needs. This adjustment was the result of a review of the use of the EMCDDA’s printing and copying devices, carried out in 2013 in order to promote efficiency.

All tenderers were treated equally and evaluated in accordance with the established and published award criteria and method, which determined the tender providing the best value for money.

The EMCDDA will pursue its efforts to improve its procurement processes, namely to reduce further the need to adjust technical specifications and ensure the provision of more effective information to tenderers on such adjustments.

10.12.2014

Official Journal of the European Union

C 442/217

REPORT

on the annual accounts of the European Union Agency for Network and Information Security for the financial year 2013, together with the Agency’s replies

(2014/C 442/25)

INTRODUCTION

The European Union Agency for Network and Information Security (hereinafter ‘the Agency’, aka ‘ENISA’), which is located in Athens and Heraklion (1), was created by Regulation (EC) No 460/2004 of the European Parliament and of the Council (2) which, following different amendments was superseded by Regulation (EU) No 526/2013 (3). The Agency's main task is to enhance the Union’s capability to prevent and respond to network and information security problems by building on national and Union efforts (4).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of key controls of the Agency'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

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Agency, which comprise the financial statements (5) and the reports on the implementation of the budget (6) for the financial year ended 31 December 2013; and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Agency and the legality and regularity of the underlying transactions (7):

(a)

The management’s responsibilities in respect of the Agency's annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (8); making accounting estimates that are reasonable in the circumstances. The Executive Director approves the annual accounts of the Agency after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the Agency in all material respects.

(b)

The auditor’s responsibility

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

Opinion on the legality and regularity of the transactions underlying the accounts

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 are legal and regular in all material respects.

10.	The comments which follow do not call the Court’s opinions into question.

COMMENTS ON BUDGETARY MANAGEMENT

11.

The overall level of committed appropriations was 94 %, which is explained mainly by the fact that additional funds requested from the Commission to finance the refurbishment of the new office in Athens were only approved in November 2013. In this context, an amount of 0,5 million euro that was not yet committed at year-end was carried over following a Management Board decision.

12.

In total, non-committed and committed appropriations carried over to 2014 amounted to 1,2 million euro (or 13,5 % of total appropriations). This mainly concerned Title II (administrative expenditure) with 0,8 million euro or 59 % of Title II appropriations. This high level is explained by the 0,5 million euro carry-over referred to in paragraph 11 and an additional 0,3 million euro carried over in order to finance furniture and networking equipment for the Athens office which was ordered towards the year-end.

OTHER COMMENTS

13.

Operational staff of ENISA were relocated to Athens in 2013 while administrative staff remain in Heraklion. It is likely that the administrative costs could be reduced if all staff were centralised in one location.

14.

According to the lease agreement between the Greek authorities, the Agency and the landlord, rent for the offices in Athens is paid by the Greek authorities. This rent is constantly paid with a delay of several months which is a business continuity and financial risk to the Agency: its operations would be affected, and its investments in office fitting and refurbishment would be lost, if the landlord were to cancel the lease agreement because of these delays in payment.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

15.

An overview of the corrective actions taken in response to the Court's comments from previous years 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) The Agency’s operational staff were relocated to Athens in March 2013. Its administrative staff remain in Heraklion.

(2) OJ L 77, 13.3.2004, p. 1.

(3) OJ L 165, 18.6.2013, p. 41.

(4) Annex II summarises the Agency's competences and activities. It is presented for information purposes.

(6) These comprise the budgetary outturn account and the annex to the budgetary outturn account.

(7) Articles 39 and 50 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).

(9) Article 107 of Regulation (EU) No 1271/2013.

ANNEX I

Follow-up of previous years’ comments

Year

Court’s comment

Status of corrective action

(Completed/Ongoing/Outstanding/N/A)

2011

The Court identified the need to improve the documentation of fixed assets. Purchases of fixed assets are recorded at invoice and not at item level. When several new assets are covered by one single invoice, there is only one entry for all the purchased assets and the total amount.

Completed

2012

Whereas the Financial Regulation and the corresponding Implementing Rules provide for a physical inventory of fixed assets at least every three years, the Agency has not carried out a comprehensive physical inventory since 2009.

Ongoing

ANNEX II

European Union Agency for Network and Information Security (Athens and Heraklion)

Competences and activities

Areas of Union competence deriving from the Treaty

(Article 114 of the Treaty on the functioning of the European Union)

‘The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.’

(Article 114 TFEU)

Responsibility for the internal market is shared between the Union and the Member States

(Article 4(2)(a) TFEU).

Competences of the Agency

(Quoted from Regulation (EU) No 526/2013 of the European Parliament and of the Council)

Objectives

1.	The Agency shall develop and maintain a high level of expertise.

2.	The Agency shall assist the Union institutions, bodies, offices and agencies in developing policies in network and information security.

The Agency shall assist the Union institutions, bodies, offices and agencies and the Member States in implementing the policies necessary to meet the legal and regulatory requirements of network and information security under existing and future legal acts of the Union, thus contributing to the proper functioning of the internal market.

4.	The Agency shall assist the Union and the Member States in enhancing and strengthening their capability and preparedness to prevent, detect and respond to network and information security problems and incidents.

5.	The Agency shall use its expertise to stimulate broad cooperation between actors from the public and private sectors.

Tasks

The Agency shall perform the following tasks:

(a)

support the development of Union policy and law, by:

(i)	assisting and advising on all matters relating to Union network and information security policy and law;

(ii)	providing preparatory work, advice and analyses relating to the development and update of Union network and information security policy and law;

(iii)

analysing publicly available network and information security strategies and promoting their publication;

(b)

support capability building by:

(i)	supporting Member States, at their request, in their efforts to develop and improve the prevention, detection and analysis of and the capability to respond to network and information security problems and incidents, and providing them with the necessary knowledge;

(ii)

promoting and facilitating voluntary cooperation among the Member States and between the Union institutions, bodies, offices and agencies and the Member States in their efforts to prevent, detect and respond to network and information security problems and incidents where these have an impact across borders;

(iii)

assisting the Union institutions, bodies, offices and agencies in their efforts to develop the prevention, detection and analysis of and the capability to respond to network and information security problems and incidents, in particular by supporting the operation of a Computer Emergency Response Team (CERT) for them;

(iv)

supporting the raising of the level of capabilities of national/governmental and Union CERTs, including by promoting dialogue and exchange of information, with a view to ensuring that, with regard to the state of the art, each CERT meets a common set of minimum capabilities and operates according to best practices;

(v)	supporting the organisation and running of Union network and information security exercises, and, at their request, advising Member States on national exercises;

(vi)

assisting the Union institutions, bodies, offices and agencies and the Member States in their efforts to collect, analyse and, in line with Member States’ security requirements, disseminate relevant network and information security data; and on the basis of information provided by the Union institutions, bodies, offices and agencies and the Member States in accordance with provisions of Union law and national provisions in compliance with Union law, maintaining the awareness, on the part of the Union institutions, bodies, offices and agencies as well as the Member States of the latest state of network and information security in the Union for their benefit;

(vii)

supporting the development of a Union early warning mechanism that is complementary to Member States’ mechanisms;

(viii)

offering network and information security training for relevant public bodies, where appropriate in cooperation with stakeholders;

(c)

support voluntary cooperation among competent public bodies, and between stakeholders, including universities and research centres in the Union, and support awareness raising, inter alia, by:

(i)	promoting cooperation between national and governmental CERTs or Computer Security Incident Response Teams (CSIRTs), including the CERT for the Union institutions, bodies, offices and agencies;

(ii)	promoting the development and sharing of best practices with the aim of attaining an advanced level of network and information security;

(iii)

facilitating dialogue and efforts to develop and exchange best practices;

(iv)	promoting best practices in information sharing and awareness raising;

(v)

supporting the Union institutions, bodies, offices and agencies and, at their request, the Member States and their relevant bodies in organising awareness raising, including at the level of individual users, and other outreach activities to increase network and information security and its visibility by providing best practices and guidelines;

(d)

support research and development and standardisation, by:

(i)	facilitating the establishment and take-up of European and international standards for risk management and for the security of electronic products, networks and services;

(ii)

advising the Union and the Member States on research needs in the area of network and information security with a view to enabling effective responses to current and emerging network and information security risks and threats, including with respect to new and emerging information and communications technologies, and to using risk-prevention technologies effectively;

(e)

cooperate with Union institutions, bodies, offices and agencies, including those dealing with cybercrime and the protection of privacy and personal data, with a view to addressing issues of common concern, including by:

(i)	exchanging know-how and best practices;

(ii)	providing advice on relevant network and information security aspects in order to develop synergies;

(f)

contribute to the Union’s efforts to cooperate with third countries and international organisations to promote international cooperation on network and information security issues, including by:

(i)	being engaged, where appropriate, as an observer and in the organisation of international exercises, and analysing and reporting on the outcome of such exercises;

(ii)	facilitating exchange of best practices of relevant organisations;

(iii)

providing the Union institutions with expertise.

2.	Union institutions, bodies, offices and agencies and Member State bodies may request advice from the Agency in the event of breach of security or loss of integrity with a significant impact on the operation of networks and services.

3.	The Agency shall carry out tasks conferred on it by legal acts of the Union.

4.	The Agency shall express independently its own conclusions, guidance and advice on matters within the scope and objectives of this Regulation.

Governance

Management Board

The Management Board is composed of one representative of each Member State, and two representatives appointed by the Commission. All representatives have voting rights. Each member of the Management Board has an alternate to represent the member in their absence.

Members of the Management Board and their alternates are appointed in light of their knowledge of the Agency’s tasks and objectives, taking into account the managerial, administrative and budgetary skills relevant to fulfil the tasks of a member of the Management Board.

The term of office of members of the Management Board and of their alternates is four years. That term is renewable.

Permanent Stakeholders Group

The Management Board, acting on a proposal by the Executive Director, appoints a Permanent Stakeholders’ Group composed of recognised experts representing the relevant stakeholders, such as the ICT industry, providers of electronic communications networks or services available to the public, consumer groups, academic experts in network and information security, and representatives of national regulatory authorities notified under Directive 2002/21/EC as well as of law enforcement and privacy protection authorities. The term of office of the Permanent Stakeholders’ Group’s members is two and a half years.

The Permanent Stakeholders’’ Group advises the Agency in respect of the performance of its activities. In particular, it advises the Executive Director on drawing up a proposal for the Agency’s work programme, and on ensuring communication with the relevant stakeholders on all issues related to the work programme.

Executive Director

The Executive Director is appointed by the Management Board, from a list of candidates proposed by the Commission, following an open and transparent selection procedure, for a term of five years which is renewable.

Executive Board

The Executive Board is made up of five members appointed from among the members of the Management Board. It must include the Chairperson of the Management Board, who may also chair the Executive Board, and one of the representatives of the Commission.

External audit

European Court of Auditors.

Internal audit

Internal Audit Service of the European Commission.

Discharge authority

European Parliament on a recommendation from the Council.

Resources made available to the Agency in 2013 (2012)

Final Budget

9,7 million euro (8,2 million euro) of which the Union subsidy is 93 % (100 %)

Staff at 31 December 2013

47 (44) posts provided for in the establishment plan, of which occupied: 43 (42).

Other posts occupied: 13 (12) contract agents; 3 (4) seconded national experts.

Total staff: 59 (58), undertaking the following tasks:

operational: 42 (40)

administrative: 17 (18)

Products and services provided in 2013 (2012)

WS (1) 1 — Evolving risk environment & opportunities

The objective of this work stream was to identify the most important evolving threats that are relevant to critical infrastructure and trust services. This was done by monitoring publicly available sources that publish threat-related data and by making a regular assessment of this data. Based on the analysis done, ENISA has proposed good practices and guidelines for mitigating these risks. The work has been performed in a collaborative manner with involved stakeholders and has used existing information sources wherever possible.

The following objectives and results are achieved:

—	collection and consolidation of information on the emerging threat landscape

—	unification of available information sources under a common context.

—	involvement of relevant stakeholders

—	formulation of key messages (good practices and guidelines) to Member States and other stakeholders on how to improve their policies and capabilities.

Number of deliverables: 7 (7)

WS2 — Improving Pan-European CIIP (2) & Resilience

Protecting Critical Information Infrastructures (CIIP) is a key priority for Member States, the Commission and industry (operators, service providers, manufacturers). By facilitating cooperation and coordination among Member States, ENISA has continued in this work stream to support all of these stakeholders in developing sound and implementable preparedness, response and recovery strategies, policies and measures to meet the challenges of a continuously evolving threat environment.

The objectives and consequently results of this work stream were to:

—	finalise the evaluation of Cyber Europe 2012 and initiate the organisation and management of the next Cyber Europe 2014

—	support the European Commission in implementing the EU’s Cybersecurity Strategy

—	support Member States and EU Commission on the development of a sound European Cyber Crisis Cooperation Framework, national contingency plans and national exercises

—	enhance the co-operation of public and private stakeholders in activities related to CIIP through the EP3R

—	further support the Commission in its efforts to guide NRAs in the implementation of both Article 13a of the revised Framework Directive for electronic communications and Article 4 of the e-Privacy Directive and consult with stakeholders on the development of an integrated approach

—	examine the feasibility of the extension of Article 13a of the revised Framework Directive for electronic communications to new areas

—	enhance the security of Smart Grids and ICS-SCADA

—	assist interested Member States in the development of their national Governmental Cloud Strategies

Number of deliverables: 16 (13)

WS3 — Enabling communities to improve network and information security (NIS)

The aim of this work stream was to help the communities that are instrumental in improving NIS to enhance their capabilities and to facilitate their work through the improvement of the legal and regulatory scenarios that they must comply with.

ENISA has continued to work with CERTs to improve baseline capabilities in Europe. The Agency has also complemented this approach by addressing other communities that are active in improving NIS of their systems and infrastructure such as network and information systems managers as well as providers of security services within individual organisations (e.g. Information Security Officers (ISOs)).

The objectives and results of this work stream were:

—	to keep up to date and enhance the operational capabilities of Member States institutions by helping the CERT community to increase its level of efficiency and effectiveness and support to law enforcement agencies, the fight against cyber-crime, the protection of children and minors, etc.,

—	to support and enhance co-operation between CERTs and other communities,

—	to develop and promote the use of training and exercise material,

—	to support the implementation of pan-European trust marks (seals) in line with the Commission's actions in this field,

—	to investigate data leakage and implement appropriate data access controls, and

—	to review the situation on the use of cryptographic techniques in Europe, following up ENISA’s work in 2011 in this field.

Number of deliverables: 15 (10)

(1) WS: Work stream

(2) CIIP: Critical Information Infrastructure Protection

Source: Annex supplied by the Agency.

THE AGENCY’S REPLIES

11.	The Agency notes that the 0,5 million euro carried over at year end were committed in 2014 at a rate of 99,78 %, and only an amount of 1 100.00 euro was cancelled.

12.

The total carry over of Title II, which reached the rate of 59,1 % of total Title II appropriations for 2013 can be further broken down to 50,5 % linked to projects and purchases relevant to the refurbishment works and upgrade of infrastructure of Athens office and 8,6 % relevant to projects not linked to the refurbishment project, such as day to day utilites’ costs. The funds for the refurbishment works were only approved on 4 November 2013.

13.

The Agency notes that the creation of an additional office based in Athens was a political compromise reached among the European Parliament, the Commission and the government of the host country, in order to increase the operational efficiency of the Agency and in particular of the work of the Core Operations Department. This decision was beyond the influence of ENISA.

14.

The Agency agrees with the comment and notes that it continuously communicates the problems and the risks involved to the partner DG CNECT and various authorities of the Greek Government in order to ensure that the issues pertaining to the payment of the subsidy from the Greek Government are overcome. To date the landlord has accepted the delays attributed to procedures of the Greek Government without imposing any penalty on the Agency. The landlord has given his consent to the launch of the refurbishment works, despite the delay in the payment of rent in 2014. The Agency, following a risk assessment which took into account the facts also noted by the Court, has launched the refurbishment works in June 2014, as the risk of cancellation of the lease agreement is considered low. The Agency continues to exercise and explore all possible remedies arising from the late payments from the Greek Government. To date the Agency has been able to mitigate any risks arising from the late payments.

10.12.2014

Official Journal of the European Union

C 442/232

REPORT

on the annual accounts of the European Railway Agency for the financial year 2013, together with the Agency’s replies

(2014/C 442/27)

INTRODUCTION

The European Railway Agency (hereinafter ‘the Agency’, aka ‘ERA’), which is located in Lille and Valenciennes, was created by Regulation (EC) No 881/2004 of the European Parliament and of the Council (1). The Agency's task is to enhance the level of interoperability of railway systems and to develop a common approach to safety in order to contribute to creating a more competitive European railway sector with a high level of safety (2).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Agency, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013; and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Agency and the legality and regularity of the underlying transactions (5):

(a)

(b)

The auditor’s responsibility

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 Agency are free from material misstatement and the transactions underlying them are legal and regular.

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

Opinion on the legality and regularity of the transactions underlying the accounts

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 are legal and regular in all material respects.

10.	The comments which follow do not call the Court’s opinions into question.

COMMENTS ON INTERNAL CONTROLS

11.

There is room to improve the accuracy and documentation of information used in the Agency’s procurement procedures.

OTHER COMMENTS

12.

According to the Agency's founding regulation (8), staff shall consist of:

—	temporary employees recruited by the Agency for a maximum of five years from among professionals from the railways sector on the basis of their qualifications and experience in the field of railway safety and interoperability,

—	officials assigned or seconded by the Commission or Member States for a maximum of five years, and

—	other servants to carry out implementing or secretarial tasks.

13.

At the end of 2013, 136 temporary employees were working for the Agency. The founding regulation also stipulates that during the first 10 years of the Agency’s operations, the five-year period for them may be extended by up to a maximum of a further three years when required to guarantee business continuity. The Agency used this option as standard practice until mid-2013. Furthermore, in the period from September 2013 to March 2014, the Agency re-employed four temporary employees (for an eight-year period) whose contracts with ERA had ended in 2013 after the maximum eight-year period.

14.

In 2013 the Agency adopted a new decision in agreement with its Administrative Board and the Commission, according to which temporary employees can have indefinite contracts. The proposal for a revised founding regulation for ERA includes similar provisions but it is unclear if and when this will be adopted by Parliament and Council.

15.

The Agency is located in Lille and Valenciennes. As the Court mentioned in its Specific Annual Report for the financial year 2006, it is likely that costs could be reduced if all operations were centralised in one location. This might also facilitate a comprehensive seat agreement with the host Member State thereby clarifying the conditions under which the Agency and its staff operate.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

16.

An overview of the corrective actions taken in response to the Court’s comments from previous years is provided in Annex I.

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 220, 21.6.2004, p. 3.

(2) Annex II summarises the Agency's competences and activities. It is presented for information purposes.

(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).

(7) Article 107 of Regulation (EU) No 1271/2013.

(8) Regulation (EC) No 881/2004, Article 24(3).

ANNEX I

Follow-up of previous years’ comments

Year	Court’s comment	Status of corrective action (Completed/Ongoing/Outstanding/N/A)
2011	The level of payments against budget appropriations improved for all titles, but remained low for title III (operational expenditure) at 47 % (39 % in 2010). This situation is at odds with the budgetary principle of annuality.	Completed
2011	The Agency’s Founding Regulation sets maximum employment periods for temporary staff recruited by the Agency from the professionals of the railways sector. According to these provisions, the Agency will have to replace half of its operational staff in the period 2013-2015, which may cause major disruptions in the Agency’s operational activities (1).	Ongoing
2011	There is room to improve the Agency’s recruitment procedures in order to fully ensure transparency and equal treatment of candidates. As an example, vacancy notices did not provide information on the required minimum number of years of post-secondary or university studies which however was used as a selection criterion. The pass marks for interviews and reserve lists, the scoring of selection criteria, the questions for oral and written tests and the weightings between written and oral tests were not set before applications were examined.	Ongoing
2012	The Agency has suppressed the Internal Audit Capability and has replaced it with an Internal Control Coordinator (ICC). The internal auditor left the Agency and there are uncertainties on how the internal auditing function provided for in the Agency’s financial regulation will be carried out under the new structure.	Completed
2012	The Agency should reinforce the controls in place to ensure that family allowances are correctly calculated and paid on the basis of complete and up to date information.	Completed
2012	The Agency does not comply with its Internal Control Standard regarding business continuity; there are no approved IT Business Continuity and Disaster Recovery plans.	Ongoing

(1) Regulation (EC) No 881/2004, Article 24.

ANNEX II

European Railway Agency (Lille/Valenciennes)

Competences and activities

Areas of Union competence deriving from the Treaty

(Article 91(1) of the Treaty on the Functioning of the European Union)

‘For the purpose of implementing Article 90, and taking into account the distinctive features of transport, the European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee and the Committee of the Regions, lay down:

(a)	common rules applicable to international transport to or from the territory of a Member State or passing across the territory of one or more Member States;

(b)	the conditions under which non-resident carriers may operate transport services within a Member State;

(c)	measures to improve transport safety;

(d)	any other appropriate provisions.’

Competences of the Agency

(Regulation (EC) No 881/2004 of the European Parliament and of the Council)

Objectives

To contribute, on technical matters, to the implementation of the Union legislation aimed at:

—	improving the competitive position of the railway systems,

—	developing a common approach to safety on the European railway system,

in order to contribute to creating a European railway area without frontiers and guaranteeing a high level of safety.

Tasks

To address recommendations to the Commission on:

—	the common safety methods (CMS) and common safety targets (CSTs) provided in the Railway Safety Directive (2004/49/EC),

—	safety certificates and measures in the field of safety,

—	development of technical specifications for interoperability,

—	vocational competencies,

—	registration of rolling stock.

To issue opinions on:

—	national safety rules,

—	monitoring the quality of the work of notified bodies,

—	interoperability of the trans-European network.

3.	To coordinate national bodies: Coordination of national safety authorities and national investigation bodies (as described in Directive 2004/49/EC, Articles 17 and 21).

Publications and databases:

—	report on safety performance (every two years),

—	report on progress with interoperability (every two years),

—	public database of safety documents,

—	public register of documents on interoperability.

Governance

Administrative Board

Comprises one representative from each Member State, four representatives from the Commission and six representatives, without the right to vote, from the professional sectors concerned.

Director

Appointed by the Administrative Board on a proposal from the Commission.

External audit

European Court of Auditors.

Discharge authority

European Parliament, following a recommendation from the Council.

Resources made available to the Agency in 2013 (2012)

Budget

25,8(25,8) million euro

Staff at 31 December 2013

Posts listed in the establishment plan: 143 (144)

Posts occupied on 31.12.2013: 135 (139)

Other staff: 15 (14)

Total staff: 150 (153), of which assigned to:

—	operational tasks: 116 (119)

—	administrative tasks: 34 (34)

Products and services in 2013

Follow-up activities, modifications of the texts, dissemination and monitoring activities in relation to the Single Safety Certificate.

Evaluation of the effectiveness and practical implementation of measures through the Joint Network Secretariat.

Development of a Single Safety Certificate Regime.

Implementation of a common template based on the relevant Directives and Commission Recommendation 2011/217/EU (known as DV29) to be used by the Member States to document the authorisation process applied.

Completion of the drafting of almost all the Technical Specifications for Interoperability (TSIs) applicable to the entire EU railway network.

Definition and compilation of the reference document of national rules for vehicle authorisation and classification of their equivalence for cross acceptance.

Reports on railway safety and interoperability.

Recommendations on safety assessment and reporting, including Common Safety Indicators and Common Safety Methods, coordination of safety authorities and investigation bodies and reporting on safety performance in the Member States.

Recommendations on safety regulation, including evaluating the way national safety rules are made available, and examination of the transposition of the Railway Safety Directive in the Member States.

Setting up and maintaining a series of registers for safety and interoperability.

Guidance, support and advice to the rail sector and MSs when implementing the telematics TSIs (TAF and TAP).

Acting as the System Authority and Change Control Manager for ERTMS (European Railway Traffic Management System); issuing the ETCS Baseline 3 specification; assisting the Commission in evaluating ERTMS projects.

Cooperation with the TEN-T Executive Agency in evaluating specific ERTMS projects.

Technical Opinions on national rules and monitoring of the work of Notified Bodies.

Accompanying appropriate recommendations with an impact assessment.

Source: Annex supplied by the Agency.

THE AGENCY’S REPLIES

11.	The Agency has taken good note of the remark of the Court and will review its procurement procedure.

12-14.

The Agency has taken note of the comments of the Court.

15.	The Agency has regular contacts with the host Member State about a seat agreement. However, the French authorities have so far taken the view that the ‘Protocol on Privileges and Immunities’ applies and that is sufficient for the Agency.

10.12.2014

Official Journal of the European Union

C 442/247

REPORT

on the annual accounts of the European Securities and Markets Authority for the financial year 2013, together with the Authority’s replies

(2014/C 442/29)

INTRODUCTION

The European Securities and Markets Authority (hereinafter ‘the Authority’, aka ‘ESMA’), which is located in Paris, was established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council (1). The Authority’s task is to improve the functioning of the EU internal financial market by ensuring a high, effective and consistent level of regulation and supervision, promoting the integrity and stability of the financial systems and strengthening international supervisory coordination in order to ensure the stability and effectiveness of the financial system (2). ESMA was set up on 1 January 2011.

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Authority, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013, and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Authority and the legality and regularity of the underlying transactions (5):

(a)

(b)

The auditor’s responsibility

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 Authority are free from material misstatement and the transactions underlying them are legal and regular.

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

Opinion on the legality and regularity of the transactions underlying the accounts

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 are legal and regular in all material respects.

10.	The comments which follow do not call the Court’s opinions into question.

COMMENTS ON BUDGETARY MANAGEMENT

11.

The overall level of committed appropriations increased from 86 % in 2012 to 93 % in 2013, indicating that commitments were made on a more timely basis. However, the level of committed appropriations carried over to 2014 was high for title III (operational expenditure) at 3 6 88 487 euro (58 %). This was caused by IT services received in 2013 but not yet paid for (0,8 million euro), IT services planned in the 2014 work programme and contracted at year-end (1,1 million euro), some delays in IT procurements (0,4 million euro) and also the multiannual nature of some IT projects.

12.

In 2013 the Authority made 12 budget transfers amounting to 5,1 million euro or 18 % of the budget (2012: 22 transfers amounting to 3,2 million euro or 16 % of the budget), which indicates continued weaknesses in budget planning.

OTHER COMMENTS

13.

Some 27 % of payments made in 2013 for goods and services received were late. Where payments were late, they were overdue by an average of 32 days. Late interest paid in 2013 amounted to 3 834 euro.

14.

According to the Protocol on the privileges and immunities of the European Union (8) and the EU VAT Directive (9), the Authority is exempt from indirect taxes. Total VAT charged to ESMA in the period 2011-2013 was 3,3 million euro. Following lengthy discussions with the host Member State, the Authority started claiming VAT reimbursements in the last quarter of 2012, but only 1,3 million euro had been claimed back by the end of 2013.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

15.

An overview of the corrective actions taken in response to the Court’s comments from previous years is provided in Annex I.

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 1 July 2014.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

(1) OJ L 331, 15.12.2010, p. 84.

(2) Annex II summarises the Authority’s competences and activities. It is presented for information purposes.

(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).

(7) Article 107 of Regulation (EU) No 1271/2013.

(8) Protocol (No 7) on the privileges and immunities of the European Union (OJ C 115, 9.5.2008, p. 266).

(9) Council Directive 2006/112/EC (OJ L 347, 11.12.2006, p. 1).

ANNEX I

Follow-up of previous years’ comments

Year	Court's comment	Status of corrective action (Completed/Ongoing/Outstanding/N/A)
2011	The Authority’s commitments amounted to 1 2 8 41 997 euro or 76 % of the 2011 budget. The commitment rates were low especially for title III ‘Operational expenditure’ (47 %). This impacted on the Authority’s IT objectives which were not entirely achieved. The low budget execution rates indicate difficulties in budget planning and implementation.	N/A
2011	The Authority’s budget for the financial year 2011 amounted to 16,9 million euro. In accordance with Article 62(1) of its Founding Regulation, 60 % of the 2011 budget was financed from Member States’ and EFTA countries’ contributions and 40 % from the Union budget. At the end of 2011, ESMA recorded a positive budget outturn of 4,3 million euro. In compliance with its Financial Regulation (1), the full amount was then recorded in the accounts as a liability towards the European Commission.	Ongoing
2011	Weaknesses were noted as regards six legal commitments made in advance of budget commitments (4 83 845 euro).	Ongoing (2)
2011	The Court identified a number of cases with a total value of 2 07 442 euro in which payment appropriations carried over to 2012 did not correspond to legal commitments made. These carry-overs were therefore irregular and should be cancelled.	Ongoing
2011	There is a need to improve the Authority’s management of fixed assets. For intangible assets developed by the Authority, accounting procedures and information on costs were not reliable.	Completed
2011	The Authority needs to improve the transparency of recruitment procedures. The number of years of experience required for a given position was not respected, applications received after the deadline were accepted, questions for oral and written tests were not set before the applications were examined by the selection board and there was no decision of the Appointing Authority to appoint the selection board.	Completed
2012	The Authority’s accounting system has not yet been validated by the Accounting Officer.	Completed
2012	During its second year of activity, the Authority took an important step with the adoption and implementation of the baseline requirements for all internal control standards. However, full implementation of the standards has not been achieved.	Ongoing
2012	There is considerable room to improve the timeliness and documentation of procurement procedures.	Ongoing
2012	The Authority’s total appropriations for 2012 amounted to 20,3 million euro, out of which 2,8 million euro (14 %) were cancelled and 4,2 million euro (21 %) of committed appropriations were carried over to 2013. The high level of cancellations results mainly from the fact that the budget was established on the basis of a fully implemented staff establishment plan at the beginning of 2012, whereas some recruitments were only made during the year. Delays in IT procurements also caused cancellations.	N/A
2012	The level of committed appropriations carried over is high for title II (administrative expenditure) at 39 % and for title III (operational expenditure) at 52 %. For title II, this was mainly caused by the fact that a significant contract for works on the Authority’s premises was awarded in December 2012 (0,6 million euro) and by the purchase of IT hardware (0,5 million euro), telephony equipment (0,1 million euro) and furniture (0,3 million euro) for which delivery was not completed at year-end. For title III, the high level of committed appropriations carried over results from the multiannual nature of significant IT development projects and delays in related procurements.	N/A
2012	In 2012, the Authority made 22 budget transfers amounting to 3,2 million euro (16 % of total 2012 budget), which indicates weaknesses in budget planning.	Ongoing
2012	The Authority needs to further improve the transparency of its recruitment procedures. In particular, in one audited recruitment procedure, the number of years of experience for a given position was not applied and in three audited recruitment procedures there was no evidence that thresholds for the shortlists were established before the examination of the applications.	Completed

(1) Articles 15(4) and 16(1).

(2) Similar cases were found in 2013.

ANNEX II

European Securities and Markets Authority (Paris)

Competences and activities

Areas of Union competence deriving from the Treaty

(Article 114 of the Treaty on the Functioning of the European Union)

The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.

Competences of the Authority

(Regulation (EU) No 1095/2010 of the European Parliament and of the Council and Regulation (EC) No 1060/2009 of the European Parliament and of the Council)

Tasks

—	To develop draft regulatory technical standards.

—	To develop draft implementing technical standards.

—	To issue guidelines and recommendations.

—	To issue recommendations where a national competent authority has not applied sectoral acts or has applied them in a way which appears to be a breach of Union law.

—	To take individual decisions addressed to competent authorities in certain emergency situations and in settlement of disagreements between competent authorities in cross-border situations.

—

In cases concerning directly applicable Union law, to take individual decisions addressed to financial market participants, where: (i) a national competent authority has not applied sectoral acts or has applied them in a way which appears to be a breach of Union law and where the competent authority has not complied with a formal opinion of the Commission; (ii) in certain emergency situations where a competent authority does not comply with the decision of the Authority adopted, or (iii) in settlement of disagreements between competent authorities in cross-border situations where a competent authority has not complied with the decision of the Authority.

—	To issue opinions to the European Parliament, the Council or the Commission on all issues related to its areas of competence.

—	To collect the necessary information concerning financial market participants to carry out the duties assigned to it.

—	To develop common methodologies for assessing the effect of product characteristics and distribution processes on the financial position of financial market participants and on consumer protection.

—	To provide a centrally accessible database of registered financial market participants in the area of its competence where specified in sectoral legislation.

—	To issue warnings in the event that a financial activity poses a serious threat to its objectives.

—

To temporarily prohibit or restrict certain financial activities that threaten the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system in the Union in the cases specified and under the conditions laid down in sectoral legislation or if so required in the case of an emergency situation.

—	To participate in the activities of colleges of supervisors, including on-site examination, carried out jointly by two or more competent authorities.

—	To address any risk of disruption in financial services that is caused by an impairment of all or parts of the financial system and has the potential to have serious negative consequences for the internal market and the real economy.

—	To draw up additional guidelines and recommendations for key financial market participants, to take account of the systemic risk posed by them.

—

To conduct an inquiry into a particular type of financial activity or type of product or type of conduct in order to assess potential threats to the integrity of financial markets or the stability of the financial system and make appropriate recommendations for action to the competent authorities concerned.

—	To carry out tasks and responsibilities delegated by competent authorities.

—	To provide opinions to competent authorities.

—	To conduct peer reviews of the activities of competent authorities.

—	To coordinate between competent authorities, in particular where adverse development could potentially jeopardise the orderly functioning and integrity of financial markets or the stability of the financial system in the Union.

—	To initiate and coordinate Union-wide assessments of the resilience of financial market participants to adverse market developments.

—	To take decisions on applications for certification and registration of credit rating agencies and on withdrawal of such certification and registration.

—	To establish cooperation agreements with the relevant credit rating agency supervisory authorities of third countries.

—	To conduct investigations of and on-site inspections at the premises of credit rating agencies, rated entities and related third parties.

—

Where a credit rating agency has committed an infringement, to take decisions to withdraw its registration, temporarily prohibit it from issuing credit ratings, suspend the use for regulatory purposes of the credit ratings it issued, require the infringement to be brought to an end, and/or issue public notices.

—	Where a credit rating agency has committed an infringement intentionally or negligently, to take decisions to impose a fine.

Governance

Board of Supervisors

Composition

Chairperson (non-voting); the head of the national public authority competent for the supervision of financial market participants in each Member State; one representative of the Commission (non-voting); one representative of the European Systemic Risk Board (non-voting); one representative of each of the other two European Supervisory Authorities (non-voting).

Tasks

Gives guidance to the work of the Authority and is in charge of taking decisions referred to in Chapter II of the founding Regulation.

Management Board

Composition

Chairperson and six other members of the Board of Supervisors, elected by and from the voting members of the Board of Supervisors. The Executive Director and a representative of the Commission participate in meetings without the right to vote (though the representative of the Commission can vote on budgetary matters).

Tasks

Ensures that the Authority carries out its mission and performs the tasks assigned to it in accordance with the founding Regulation.

Chairperson

Representative of the Authority responsible for preparing the work of the Board of Supervisors and chairing the meetings of the Board of Supervisors and the Management Board. Appointed by the Board of Supervisors after having been heard by the European Parliament.

Executive Director

Appointed by the Board of Supervisors after confirmation by the European Parliament. In charge of the management of the Authority and prepares the work of the Management Board.

Internal audit

European Commission’s Internal Audit Service (IAS).

External audit

European Court of Auditors.

Discharge authority

European Parliament, acting on a recommendation from the Council.

Resources made available to the Authority in 2013

Final Budget

Total budget: 28,189 million euro, including:

Union subsidy: 8,6 million euro

Contributions from National Competent Authorities: 12,9 million euro

Fees from supervised entities: 6,53 million euro (Credit Rating Agencies: 5,7 million euro; Trade Repositories: 0,83 million euro)

Staff as at 31 December 2013

—	Statutory staff: 106 temporary staff posts authorised in the establishment plan, of which recruited: 102

—	Contract staff: 25 contract staff posts planned in the budget; contract staff posts actually filled at 31.12.2013: 19

—	Seconded National Experts: 14 Seconded National Expert posts planned in the budget; Seconded National Experts posts actually filled at 31.12.2013: 15

Products and services in 2013

—	Monitoring financial stability. Issued several periodic risk reports and trend summaries of financial markets.

—	Conducted tailored economic research and impact assessments.

—	Contributed to ESRB work on central counterparties and systemic risk.

—	Developed benchmark principles and recommendations together with EBA.

—	Looked into impact of the Short-Selling Regulation.

—	Carried out reviews of retailisation in the EU. Published a report on retailisation, i.e. the sales of complex products to retail investors.

—	Expanded work on monitoring markets and financial innovation. Put in place a financial innovation framework.

—	Conducted in-depth analysis of innovative financial products and processes. Conducted analysis of bail-in securities and securitisation. Surveyed NCAs on the topics of captive placement and crowdfunding.

—	Monitored and analysed retail investor trends.

—	Worked on investor education. Became an associate member of the OECD International Network on Investor Education.

—	Prepared reinforced investor protection regime under MiFID II. Prepared for future investor protection work.

—	Issued remuneration guidelines for investment firms. Guidelines covered governance, design and control of pay schemes.

—	Warned investors about contracts for difference (CFDs). Published joint warning with EBA on dangers of investing in CFDs.

—	Issued jointly with EBA guidelines for complaints-handling for securities and banking.

—	Published three ESAs joint positions on principles for manufacturers’ product oversight and governance processes.

—	Held Joint Consumer Protection Day of the three ESAs in Paris.

—	Strengthened its credit rating agencies (CRA) supervision. Twenty-two CRAs registered, two certified.

—

Following the cross-CRAs investigation into the bank rating methodologies in 2012, the implementation of the resulting remedial actions was monitored in 2013 as part of on-going supervision. Published a report on sovereign ratings investigation. Carried out an assessment of 14 small and medium-sized CRAs focusing on the systems and controls put in place by the CRAs to ensure compliance with the regulation.

—	Assessed CRAs’ compliance with the new requirements focusing on the disclosure aspects of sovereign ratings, pricing policies and procedures.

—	Enhanced its CRA risk analysis framework. Looked into CRAs’ implementation of regulatory rule changes. Furthered ESA cooperation and cooperation with international authorities on CRA matters.

—

Conducted CRA policy-related work. Published guidelines and recommendations providing clarity on the scope of the CRA Regulation and the list of registered CRAs with their market shares. Published a discussion paper on CRA3 implementation and on the three draft Regulatory Technical Standards (RTS). Published the first advice concerning the feasibility of a network of smaller CRAs.

—	Authorised six trade repositories and took on supervision.

—	Participated in CCPs supervisory colleges. Finalised a framework written agreement for the establishment and functioning of the colleges of supervisors and a common risk assessment template. Began recognition of third-country CCPs — 35 third-country CCPs applied for recognition.

—	Published further advice on the equivalence between the EU regulatory regime for CRAs and the respective legal and supervisory frameworks of Argentina, Brazil, Mexico, Hong Kong and Singapore.

—

Provided implementing rules for EMIR. Published Q&A to promote consistent implementation of EMIR. This included:

—	Preparing technical details for clearing obligation

—	Commencing examination of pension scheme arrangements and intra-group transactions

—	Raising awareness of non-financial counterparties (NFC) on obligation

—	Issuing regulatory technical standards on CCP colleges

—	Publishing a final report on the guidelines and recommendations for interoperability arrangements, as mandated under EMIR

—	Issuing standards on OTC derivatives entered into by non-EU counterparties

—	Advising Commission on equivalence of third-country rules and EMIR

—	Preparing for Central Securities Depositories Regulation (CSDR)

—	Coordinating international derivatives dialogue

—	Prepared for future MiFID II mandates.

—	Submitted to the Commission the standards on acquisitions and increases in holdings in investment firms under current MiFID. Reviewed implementation of MiFID conduct of business rules.

—	Reviewed and clarified data reporting rules from a cross-regulatory perspective.

—	Clarified reporting of on-exchange derivatives. Prepared details for transaction reporting, order record keeping and reference data.

—	Advised Commission on review of the Short-Selling Regulation.

—	Prepared implementing measures of future Market Abuse Regulation (MAR). Consulted on MAR policy options for certain implementing measures.

—	Strengthened framework for retail investment funds.

—	Clarified impact of EMIR on the calculation of counterparty risks for UCITS.

—	Concluded supervisory cooperation arrangements for alternative investment funds with 46 non-EU authorities.

—	Continued clarifying rules for alternative investment funds (AIFMs). Published a final report on Draft RTS on types of AIFMs and submitted it to the Commission for endorsement.

—	Clarified scope of AIFMD. Published a final report on guidelines on key concepts of the AIFMD. Adopted remuneration guidelines for alternative investment fund managers. Published a final report on guidelines on sound remuneration policies under the AIFMD.

—	Clarified reporting requirements for alternative investment fund managers. Published guidelines on reporting obligations under the AIFMD. Addressed late transposition of the AIFMD. Issued an opinion on practical arrangements for the late transposition of the AIFMD.

—	Delivered first standards under Prospectus Directive (PD). The draft RTS and the report were submitted to the Commission. Updated framework for equivalence of third-country prospectuses. Prepared standards on transparency requirements for major shareholdings.

—	Published report on liability regimes under Prospectus Directive (PD).

—	Clarified concept of ‘acting in concert’ to international investors. Published a statement containing information on shareholder cooperation and acting in concert under the PD.

—	Promoted convergent application of Short-Selling Regulation.

—	Finalised guidelines on market making activities. Published guidelines on the exemption for market making activities and primary market operations.

—	Facilitated and coordinated the implementation of temporary bans. ESMA played its coordination role in eight instances in 2013.

—	Monitored settlement discipline and fails.

—	Contributed to the consistent application of International Financial Reporting Standards (IFRS) in the EU. Consulted on draft guidelines on enforcement of financial information. Published a consultation paper on proposed guidelines on the enforcement of financial information.

—	Compared IFRS and EU firms’ financial statements. Participated in the development of IFRS. Prepared standards for financial information. Monitored proposed rules on audit.

—	Facilitated development of code of conduct for EU proxy advising industry.

—	Reviewed Member States’ implementation of EU law. Amended methodology for peer reviews. Finalised a peer review on its Money Market Funds Guidelines.

Source: Annex supplied by the Authority.

THE AUTHORITY’S REPLIES

11.

Regarding the high level of carry-overs, even so they are due to the not yet paid financial liabilities of the IT contracts and the multiannual nature of IT projects under those contracts and, therefore, impossible to eliminate completely, ESMA is further strengthening the procurement plan monitoring to reduce the level of carry-overs to the minimum level possible.

12.

Regarding the number of budget transfers, the comment of the Court is noted. It should be kept in mind that ESMA’s budget 2013 was prepared at the end of 2011, e.g. after less than a year of operation for the Authority. In 2013, a new budget planning methodology has been put in place to minimise the need of budget transfers in 2015 and beyond. ESMA has also started in 2013 to set up periodic budget reviews to improve budget implementation.

13.

ESMA is aware of the issue related to late payments and took several initiatives in 2013 in order to address it. ESMA has enhanced monitoring with the setup of biweekly reports and has developed a training campaign on the payment circuits. Finally, ESMA streamlined at the end of 2013 the financial circuits and adapted the forms to improve the timeliness of the process.

14.

Due to the ongoing discussions on the headquarter agreement, ESMA’s process to recover VAT from the French government was implemented only end 2012. In 2013, ESMA had therefore to process a back log of VAT claims for which the last batch was sent out in May 2014. Together with finalising the handling of the backlog, a regular quarterly VAT claiming procedure has been put in place at the end of 2013. With the above measures, ESMA expects to significantly reduce or eliminate the outstanding VAT by the end of 2014.

10.12.2014

Official Journal of the European Union

C 442/267

REPORT

on the annual accounts of the Euratom Supply Agency for the financial year 2013, together with the Agency’s replies

(2014/C 442/31)

INTRODUCTION

The Euratom Supply Agency (hereinafter ‘the Agency’), located in Luxembourg, was created in 1958 (1). Council Decision 2008/114/EC, Euratom (2) replaced the preceding Statutes of the Agency. The Agency’s main task is to ensure a regular supply of nuclear materials, in particular nuclear fuels, to EU users, by means of a common supply policy based on the principle of equal access to sources of supply.

From 2008 up to and including 2011, the Agency did not receive a budget of its own to cover its operations. The Commission bore all costs incurred by the Agency when implementing its activities. For 2012 and 2013, the Agency was granted its own budget by the Commission, which however only covers a minor part of its expenditure.

STATEMENT OF ASSURANCE

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Agency, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013; and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Agency and the legality and regularity of the underlying transactions (5):

(a)

(b)

The auditor’s responsibility

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 Agency are free from material misstatement and the transactions underlying them are legal and regular.

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

Opinion on the legality and regularity of the transactions underlying the accounts

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 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 RELIABILITY OF ACCOUNTS

11.

The notes to the Agency’s 2013 annual accounts explain that all salaries and some additional costs for administrative services were paid directly from the Commission’s budget. The salary costs are disclosed, but no details are provided on the costs for the administrative services. Therefore the extent to which the Agency is dependent upon the Commission is not fully visible.

COMMENTS ON INTERNAL CONTROLS

12.

There is insufficient documentation of the main elements of the Agency’s internal controls, such as a risk management and control strategy, procedures to monitor performance, an assessment of the functioning of the internal control system and a code of professional standards.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

13.

An overview of the corrective actions taken in response to the Court's comments from previous years is provided in Annex I.

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 1 July 2014.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

(1) OJ 27, 6.12.1958, p. 534/58.

(2) OJ L 41, 15.2.2008, p. 15.

(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).

(7) Article 107 of Regulation (EU) No 1271/2013.

ANNEX I

Follow-up of previous years’ comments

Year

Court's comment

Status of corrective action

(Completed/Ongoing/Outstanding/N/A)

2011

Without calling into question the opinion expressed in paragraph 10, the Court wishes to draw again attention to the following matter. Article 54 of the Treaty establishing the European Atomic Energy Community provides that the Agency shall have financial autonomy. Article 7 of the Agency’s Statutes provides that ‘the expenditure of the Agency shall consist of administrative expenses of its staff and of the Committee, as well as expenses resulting from contracts entered into with third parties’. In fact, the Agency has not, since 2008, received a budget. That being the case, the European Commission has directly discharged the Agency’s expenses mentioned in Article 7 above. In the Court’s view, this situation is at odds with the Statutes of the Agency and the Court considers that the Agency and the Commission should, together with all interested parties, consider measures to eliminate this situation.

Completed

2012

Without calling into question the opinion expressed in paragraph 9, the Court wishes to draw attention to the following matter. Between 2008 and 2011, the Agency did not receive its own budget and the European Commission directly financed and discharged all expenditure. The Court had considered this situation to be at odds with the Statutes of the Agency.

For 2012, following the Court’s comments, the Commission granted the Agency its own budget amounting to 98 000 euro (1 04 000 euro including financial revenue from own investments). Whereas Article 54 of the Treaty establishing the European Atomic Energy Community and Article 6 of the Agency’s Statutes provide that it shall have financial autonomy, most of the Agency’s expenditure (staff, office space and IT systems) is still financed directly by the Commission. As far as staff costs are concerned, this is foreseen in Article 4 of its Statutes. The provisions are contradictory which goes against the required financial autonomy of the Agency.

Outstanding

ANNEX II

Euratom Supply Agency (Luxembourg)

Competencies and activities

Areas of Union competence deriving from the Treaty

Common supply policy for nuclear materials in accordance with the principles and the objectives (security of supply) set by the Euratom Treaty.

The Euratom Supply Agency (ESA) was established directly by Article 52 of the Euratom Treaty, signed in 1957. The ESA is further governed by its Statutes, laid down by a Council decision on the legal basis of Article 54 of the Euratom Treaty.

Competences of the Agency

(as defined in the Euratom Treaty, mainly Chapter 6 thereof, and Council Decision 2008/114/EC, Euratom of 12 February 2008 establishing Statutes for the Euratom Supply Agency)

Objectives

—	Ensure the supply of nuclear materials, by means of a common supply policy, on the principle of equal access to sources of supply.

—	Ensure that all users in the Community receive a regular and equitable supply of ores and nuclear fuels.

—	Identify and monitor market trends likely to affect security of supply for nuclear materials and services in the European Union.

—	Contribute to the Community policies by providing expertise, information and advice on any subject connected with the operation of the market in nuclear materials and services.

Tasks

As per the Euratom Treaty, the ESA is endowed with a right of option on nuclear materials produced in the territories of Member States and with an exclusive right to conclude contracts relating to the nuclear materials coming from inside the Community or from outside.

In the light of the above, the ESA’s tasks include:

—	to assess the commitments negotiated between the parties concerned and, consequently, conclude, deny concluding or accept to conclude only under certain conditions, any contract, or amendment to it, pertaining to the supply of materials in the meaning of Article 52 of the Euratom Treaty,

—	to receive notification of all contracts relating to the processing, conversion or shaping of ores, source materials or special fissile materials, as per Article 75 of the Euratom Treaty, and process them,

—	to receive notification of all transfers, import or export operations concerning small quantities of ores, source materials or special fissile materials, as per Article 74 of the Euratom Treaty, and process them,

—	to instruct the files and take all the preparatory steps in view of a Commission decision in cases for which, pursuant to Euratom law, the agreement of the Collège is required,

—	to manage, as appropriate, the contracts which it concluded or of which it received notification,

—	to collect and process information with a view to constantly monitoring the market of nuclear materials and services in the EU. In 2013, the observatory role of ESA has been further enlarged to cover the aspects of the supply of medical radioisotopes in the EU,

—	to publish regular reports for internal use, and/or for the general public, regarding the operation of, and recent trends in, the market of nuclear materials and services,

—	to provide the Community, upon request, with expertise and advice on any subject connected with the operation of the market of nuclear materials and services,

—	to liaise with the ESA’s Advisory Committee (AC) and seek the opinion thereof and to participate, as appropriate, including by providing a secretariat, to the said AC’s meetings.

Governance

—	The Agency is endowed with legal personality and financial autonomy.

—	It operates under the supervision of the Commission, on a non-profit-making basis.

—	The Director-General (DG) and the staff of the ESA have to be, or to become, officials of the European Communities. They have to possess a security clearance. Their salaries are paid by the Commission.

—	The Euratom Treaty and the ESA’s Statutes determine the Agency’s capital and the conditions upon which it is subscribed.

Director-General

Appointed by the Commission, for an indefinite period of time. The DG’s duties and powers are determined, in particular, in the ESA’s Statutes.

The Euratom Supply Agency’s Supervision by the Commission

The Commission may issue directives to the Agency and possesses a right of veto over the Agency’s decisions. Moreover, certain decisions of the ESA are subject to prior Commission authorisation.

Advisory Committee

Composed from members of the Member States, who are appointed intuitu personae for a (renewable) three-year term. The AC assists the Agency in carrying out its tasks. It acts as a link between the ESA and both producers and users in the nuclear industry. The Committee may be consulted upon all matters in the Agency’s purview. It has to give its opinion on all matters listed in Article 13 of the Statutes. It normally meets twice every year.

External audit

European Court of Auditors.

Discharge authority

European Parliament.

Resources made available to the Agency in 2013 (2012)

Budget

1 04 000 (1 04 000) euro, including contribution from the Commission: 98 000(98 000) euro.

Staff on 31 December 2013

Total staff number: 18 (17) (including the Director-General).

Products and services provided in 2013 (2012)

Security of supply ensured

Transactions processed

Some 279 (270) transactions, including contracts, amendments and notifications of the front-end activities, were processed by the Agency in 2013.

Reports

In 2013, the Agency issued:

—	the Agency’s Annual Report for 2012,

—	4 (3) Quarterly Uranium Market Reports,

—	6 (6) bimonthly Nuclear News Digests,

—	40 (45) Weekly Nuclear News Briefs, for readers inside the EC.

Participation to activities of the Euratom Supply Agency’s Advisory Committee

—	The Agency’s AC held two meetings (in April and November), with the Agency’s support and participation.

—	The Agency facilitated the activities of two Working Groups of its AC.

Relations with other EU Institutions and International Cooperation

Relation with the EC as described above.

Each year the Agency has to submit to the European Parliament, the Council and the Commission a report covering its activities in the previous year, as well as its work programme for the coming year.

The ESA cooperates also with the international organisations, namely the IAEA (International Atomic Energy Agency) and the OECD/NEA (Nuclear Energy Agency). In that context, the Agency participates in the joint NEA/IAEA Uranium Group and in the NEA High-Level Group on the Security of Supply of Medical Radioisotopes (HLG-MR).

Security of supply of medical radioisotopes

In September 2013, ESA was entrusted the chairmanship of the European Observatory on the Supply of Medical Radioisotopes to help implement a European Council policy towards ensuring continuity of supply for medical radioisotopes.

Source: Information supplied by the Agency.

THE AGENCY’S REPLIES

12.

The notes to the Agency’s 2013 final accounts include an estimate of salary costs. Precise data concerning the Agency’'s administrative costs covered by the Commission are owned by the latter. In our view, the fact that the Commission pays the salaries of the Agency’s staff (and some other administrative expenses) does not jeopardise per se the ESA’s independence while it enables economies of scale.

13.	In the Agency’s understanding, an appropriate risk management and control strategy is effectively in place. However, starting within the current year, the Agency will provide further, structured documentation on risk-assessment and risk-mitigation actions.

10.12.2014

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

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

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

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Foundation, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013; and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Foundation and the legality and regularity of the underlying transactions (5):

(a)

The management’s responsibilities in respect of the Foundation’s annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (6); making accounting estimates that are reasonable in the circumstances. The Director approves the annual accounts of the Foundation after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the Foundation in all material respects.

(b)

The auditor’s responsibility

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 Foundation are free from material misstatement and the transactions underlying them are legal and regular.

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

In the Court’s opinion, the Foundation’s annual accounts present fairly, in all material respects, its financial position as at 31 December 2013 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

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 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 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.

(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).

(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. [...]

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:

—	man at work,

—	organisation of work and particularly job design,

—	problems peculiar to certain categories of workers,

—	long-term aspects of the improvement of the environment,

—	the distribution of human activities in space and in time.

Tasks

—	To foster the exchange of information and experience in these fields,

—	to facilitate contact between universities, study and research institutes, economic and social administrations and organisations,

—	to carry out studies or to conclude study contracts and to provide assistance for pilot projects,

—	to cooperate as closely as possible with existing specialised institutes in the Member States and at international level.

Governance

The Governing Board (GB)

—	from each Member State: one government representative, one representative from employers’ organisations and one workers’ representative,

—	three representatives from the Commission,

—	one regular meeting per year.

The Bureau of the GB

—	consists of 11 members; three members from each of the social partners and the governments, two from the Commission,

—	it monitors the implementation of decisions of the GB and takes measures to ensure proper management between GB meetings,

—	six regular meetings per year.

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.

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)

Activities and services provided in 2013

Increasing labour market participation and combating unemployment by creating jobs, improving labour market functioning and promoting integration

—	European Restructuring Monitor (ERM): 1 489 restructuring fact sheets added; two comparative analytical reports.

—	European Restructuring Monitor: ERM Annual Report 2013 — Monitoring and managing restructuring in the 21st century.

—	Other reports: Restructuring in SMEs in Europe; Born global: The potential of job creation in new international businesses; Employment polarisation and job quality in the crisis: European Jobs Monitor 2013.

—	‘Restructuring legislation’ database and ‘Restructuring support instruments’ database verified and updated.

Improving working conditions and making work sustainable throughout the life course

—	European Working Conditions Observatory (EWCO): 100 information updates added; four comparative analytical reports; Annual Report: Industrial relations and working conditions developments in Europe 2012; six survey reports.

—

5th European Working Conditions Survey — five secondary analysis reports published: Working time and work–life balance in a life course perspective; Health and well-being at work; Work organisation and employee involvement in Europe; Women, men and working conditions in Europe; Quality of employment conditions and employment relations in Europe.

—	3rd European Company Survey: fieldwork in 32 countries completed; summary of first findings published.

—	Report: Impact of the crisis on working conditions in Europe.

Developing industrial relations to ensure equitable and productive solutions in a changing policy context

—

European Industrial Relations Observatory (EIRO): 247 information updates added; four representativeness studies; two annual updates on pay and working time; Annual Report: Industrial relations and working conditions developments in Europe 2012; four comparative analytical reports; two survey reports.

—	Other reports: Social partners’ involvement in pension reform in the EU; National practices of information and consultation in Europe; Role of governments and social partners in keeping older workers in the labour market.

Improving standards of living and promoting social cohesion in the face of economic disparities and social inequalities

—

3rd European Quality of Life Survey:

—	three secondary analysis reports published: Quality of life in Europe — Quality of society and public services; Third European Quality of Life Survey — Quality of life in Europe: Social inequalities; Third European Quality of Life Survey — Quality of life in Europe: Subjective well-being,

—	two policy papers published: Household over-indebtedness in the EU: The role of informal debts; Political trust and civic engagement during the crisis,

—	reports on quality of life in enlargement countries published.

—	Report and country case studies: More and better jobs in home-care services.

—	Report: Mobility and migration of healthcare workers in central and eastern Europe.

Communication and sharing ideas and experience

—	1 13 760 downloads of reports from Eurofound website. 2 0 60 195 user visits.

—	172 publications in PDF (671 linguistic versions).

—	220 EU policy documents quoting references to Eurofound findings and expertise.

—	202 on-request contributions to events.

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.

10.12.2014

Official Journal of the European Union

C 442/282

REPORT

on the annual accounts of Eurojust for the financial year 2013, together with Eurojust’s replies

(2014/C 442/33)

INTRODUCTION

The European Union’s Judicial Cooperation Unit (hereinafter ‘Eurojust’), which is located in The Hague, was set up by Council Decision 2002/187/JHA (1) with a view to stepping up the fight against serious organised crime. Its objective is to improve the coordination of cross-border investigations and prosecutions between the Member States of the European Union, and between Member States and non-Member States (2).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of key controls of Eurojust’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

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of Eurojust, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013, and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of Eurojust and the legality and regularity of the underlying transactions (5):

(a)

The management’s responsibilities in respect of Eurojust's annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (6); making accounting estimates that are reasonable in the circumstances. The Administrative Director approves the annual accounts of Eurojust after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of Eurojust in all material respects.

(b)

The auditor’s responsibility

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 Eurojust are free from material misstatement and the transactions underlying them are legal and regular.

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

In the Court’s opinion, Eurojust’s annual accounts present fairly, in all material respects, its financial position as at 31 December 2013 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

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 are legal and regular in all material respects.

10.	The comments which follow do not call the Court’s opinions into question.

COMMENTS ON BUDGETARY MANAGEMENT

11.

The level of committed appropriations for the different titles varied between 99 % and 98 % of total appropriations, indicating that legal commitments were made in a timely manner. However, the level of committed appropriations carried over to 2014 was high for title III (operating expenditure) at 2 3 41 825 euro (32 %). This was mainly the result of delays associated with the handover of internal software management to a new service provider at the year-end. Also, reimbursements of expenditure from grant schemes which were used to support ‘Joint Investigation Teams’ were only due in 2014.

12.

In 2013, the Agency made 49 budget transfers affecting 101 budget lines. This indicates weaknesses in budget planning and implementation.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

13.

An overview of the corrective actions taken in response to the Court's comments from previous years is provided in Annex I.

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 1 July 2014.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

(1) OJ L 63, 6.3.2002, p. 1.

(2) Annex II summarises Eurojust’s competences and activities. It is presented for information purposes.

(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).

(7) Article 107 of Regulation (EU) No 1271/2013.

ANNEX I

Follow-up of previous years’ comments

Year	Court’s comment	Status of corrective action (Completed/Ongoing/Outstanding/N/A)
2011	In the report for the financial year 2010, the Court noted that there was scope to reconsider the definition of respective roles and responsibilities between the Director and the College of Eurojust in order to avoid the overlap of responsibilities, currently resulting from the Founding Regulation (1). No corrective measures were taken in 2011.	Ongoing
2011	Eurojust has not yet adopted all Implementing Rules of the Staff Regulations (2).	Completed
2012	A framework contract for security services was signed in 2008 and amended in 2009. The amended formula to calculate prices increased them progressively up to 22 %, whereas the original framework contract had provided for a maximum increase of 4 %. The total price increase above the 4 % ceiling amounted to some 4 40 000 euro for the 2008 to 2012 period, of which some 68 000 euro were paid in 2012. Such a significant increase may undermine the transparency and fairness of the initial procurement procedure and distort competition.	N/A
2012	There is room to improve the transparency of recruitment procedures. There was no evidence that questions for tests and interviews were set before the examination of the applications by the Selection Board and there is no evidence that the weighting between written tests and interviews was set before candidates’ screening.	Completed

(1) Articles 28, 29, 30 and 36 of Decision 2002/187/JHA, as amended by Decisions 2003/659/JHA (OJ L 245, 29.9.2003, p. 44) and 2009/426/JHA (OJ L 138, 4.6.2009, p. 14).

(2) Implementing rules are missing for the following areas: ‘Reclassification’, ‘Administrative inquiries and disciplinary procedure’, ‘Part-time work’, ‘Job-Sharing’, ‘Middle management’, ‘Temporary occupation of management posts’, ‘Appraisal senior management’, ‘Early retirement without reduction of pension rights’, ‘Leave’, ‘Staff Committee’ and ‘Mission guide.’

ANNEX II

Eurojust (The Hague)

Competences and activities

Areas of Union competence deriving from the Treaty

(Article 85 of the Treaty on the Functioning of the European Union)

Eurojust’s mission is to support and strengthen coordination and cooperation between national authorities in the fight against serious cross-border crime affecting the European Union.

Competences of Eurojust

(as defined in Articles 3, 5, 6 and 7 of Council Decision 2002/187/JHA, as amended by Decision 2003/659/JHA and Decision 2009/426/JHA)

Objectives

Article 3 of Council Decision 2002/187/JHA, as amended by Decision 2003/659/JHA and Decision 2009/426/JHA

In the context of investigations and prosecutions, concerning two or more Member States, of criminal behaviour referred to in Article 4 in relation to serious crime, particularly when it is organised, the objectives of Eurojust shall be:

(a)

to stimulate and improve the coordination, between the competent authorities of the Member States, of investigations and prosecutions in the Member States, taking into account any request emanating from a competent authority of a Member State and any information provided by any competent body by virtue of provisions adopted within the framework of the Treaties;

(b)	to improve cooperation between the competent authorities of the Member States, in particular by facilitating the execution of requests for, and decisions on, judicial cooperation, including regarding instruments giving effects to the principle of mutual recognition;

(c)	to support otherwise the competent authorities of the Member States in order to render their investigations and prosecutions more effective.

Tasks

Article 5 of Council Decision 2002/187/JHA, as amended by Decision 2003/659/JHA and Decision 2009/426/JHA

In order to accomplish its objectives, Eurojust shall fulfil its tasks:

(a)	through one or more of the national members concerned in accordance with Article 6, or

(b)

as a College in accordance with Article 7:

(i)	when so requested by one or more of the national members concerned by a case dealt with by Eurojust, or

(ii)	when the case involves investigations or prosecutions which have repercussions at Union level or which might affect Member States other than those directly concerned, or

(iii)

when a general question relating to the achievement of its objectives is involved, or

(iv)	when otherwise provided for in this Decision.

2.	When it fulfils its tasks, Eurojust shall indicate whether it is acting through one or more of the national members within the meaning of Article 6 or as a College within the meaning of Article 7.

Article 6 of Council Decision 2002/187/JHA, as amended by Decision 2003/659/JHA and Decision 2009/426/JHA

When Eurojust acts through its national members concerned, it:

(a)

may ask the competent authorities of the Member States concerned, giving its reasons, to:

(i)	undertake an investigation or prosecution of specific acts,

(ii)	accept that one of them may be in a better position to undertake an investigation or to prosecute specific acts,

(iii)

coordinate between the competent authorities of the Member States concerned,

(iv)	set up a joint investigation team in keeping with the relevant cooperation instruments,

(v)	provide it with any information that is necessary for it to carry out its tasks,

(vi)	take special investigative measures,

(vii)

take any other measure justified for the investigation or prosecution;

(b)	shall ensure that the competent authorities of the Member States concerned inform each other on investigations and prosecutions of which it has been informed;

(c)	shall assist the competent authorities of the Member States, at their request, in ensuring the best possible coordination of investigations and prosecutions;

(d)	shall give assistance in order to improve cooperation between the competent national authorities;

(e)	shall cooperate and consult with the European Judicial Network, including making use of and contributing to the improvement of its documentary database;

(f)	shall, in the cases referred to in Article 3(2) and (3) and with the agreement of the College, assist investigations and prosecutions concerning the competent authorities of only one Member State.

2.	The Member States shall ensure that competent national authorities respond without undue delay to requests made under this Article.

Article 7 of Council Decision 2002/187/JHA, as amended by Decision 2003/659/JHA and Decision 2009/426/JHA

When Eurojust acts as a College, it:

(a)

may in relation to the types of crime and the offences referred to in Article 4(1) ask the competent authorities of the Member States concerned, giving its reasons:

(i)	to undertake an investigation or prosecution of specific acts,

(ii)	to accept that one of them may be in a better position to undertake an investigation or to prosecute specific acts,

(iii)

to coordinate between the competent authorities of the Member States concerned,

(iv)	to set up a joint investigation team in keeping with the relevant cooperation instruments,

(v)	to provide it with any information that is necessary for it to carry out its tasks;

(b)	shall ensure that the competent authorities of the Member States inform each other of investigations and prosecutions of which it has been informed and which have repercussions at Union level or which might affect Member States other than those directly concerned;

(c)	shall assist the competent authorities of the Member States, at their request, in ensuring the best possible coordination of investigations and prosecutions;

(d)	shall give assistance in order to improve cooperation between the competent authorities of the Member States, in particular on the basis of Europol's analysis;

(e)	shall cooperate and consult with the European Judicial Network, including making use of and contributing to the improvement of its documentary database;

(f)	may assist Europol, in particular by providing it with opinions based on analyses carried out by Europol;

(g)	may supply logistical support in the cases referred to in points (a), (c) and (d). Such logistical support may include assistance for translation, interpretation and the organisation of coordination meetings.

Where two or more national members cannot agree on how to resolve a case of conflict of jurisdiction as regards the undertaking of investigations or prosecution pursuant to Article 6 and in particular Article 6(1)(c), the College shall be asked to issue a written non-binding opinion on the case, provided the matter could not be resolved through mutual agreement between the competent national authorities concerned. The opinion of the College shall be promptly forwarded to the Member States concerned. This paragraph is without prejudice to paragraph 1(a)(ii).

Notwithstanding the provisions contained in any instruments adopted by the European Union regarding judicial cooperation, a competent authority may report to Eurojust recurrent refusals or difficulties concerning the execution of requests for, and decisions on, judicial cooperation, including regarding instruments giving effect to the principle of mutual recognition, and request the College to issue a written non-binding opinion on the matter, provided it could not be resolved through mutual agreement between the competent national authorities or through the involvement of the national members concerned. The opinion of the College shall be promptly forwarded to the Member States concerned.

Governance

(Articles 2, 9, 23, 28, 29 and 36 of Eurojust Decision 2002/187/JHA; Article 3 of the Rules of Procedure of Eurojust)

College

The College is responsible for the organisation and operation of Eurojust. The College is composed of National Members who are seconded by each Member State in accordance with its legal system and who are prosecutors, judges or police officers. The College elects its President from among the National Members.

Director

The Administrative Director is appointed by the College acting by a two-thirds majority.

The Joint Supervisory Body

Supervises the processing of personal data.

External audit

European Court of Auditors.

Discharge authority

European Parliament acting on a Recommendation from the Council acting by qualified majority.

Resources made available to Eurojust in 2013 (2012)

Final budget

32,4(33,3) million euro including assigned revenue

Staff as at 31 December 2013

National Members: 28 (of which 2 based in Member States) (27, of which 2 based in Member States)

Deputy National Members: 20 (of which 11 based in Member States) (17, of which 10 based in Member States)

Assistants to National Members: 21 (of which 8 based in Member States) (22, of which 11 based in Member States)

Temporary staff: 203 (188)

Contract staff: 27 (29)

Seconded national experts: 14 (18)

Products and services provided in 2013 (2012)

Number of coordination meetings: 206 (194)

Total number of cases: 1 576(1 533)

Deception and fraud: 472 (382) (1)

(Mobile) organised crime: 264 (231) (1)

Drug trafficking: 248 (263) (1)

Money laundering: 202 (144) (1)

Illegal immigration and trafficking in human beings: 110 (89) (1)

Corruption: 56 (30) (1)

Cybercrime: 29 (42) (1)

Terrorism: 17 (32) (1)

Criminal offences affecting the EU’s financial interests: 15 (27) (1)

(1) The crime list used for the classification of the cases reflects the Eurojust priority crime types in 2013.

Source: Annex supplied by Eurojust.

EUROJUST’S REPLIES

11.	Eurojust accepts the fact that carry-overs to 2014 for title III are relatively high, however refers to the justifications identified by the Court. Eurojust remains vigilant to avoid any unjustified carry-overs.

12.	Eurojust accepts the comment and has already implemented the guidance of the Court through the reduction of the number of budget lines used in financial year 2014 by 26,4 %.

10.12.2014

Official Journal of the European Union

C 442/290

REPORT

on the annual accounts of the European Police Office for the financial year 2013, together with the Office’s replies

(2014/C 442/34)

INTRODUCTION

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

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

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Office, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013; and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

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 (5):

(a)

The management’s responsibilities in respect of the Office's annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (6); making accounting estimates that are reasonable in the circumstances. The Director approves the annual accounts of the Office after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the Office in all material respects.

(b)

The auditor’s responsibility

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.

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

Opinion on the legality and regularity of the transactions underlying the accounts

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 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.

Although the Office has improved the preparation, execution and documentation of procurement procedures over the years, not all decisions taken in 2013 were based on sufficiently specific selection criteria, realistic price offers or in accordance with the established professional requirements. This affected the effectiveness of the procurement procedures.

COMMENTS ON BUDGETARY MANAGEMENT

12.

Budget implementation rates further improved in 2013 and total carry-overs of committed appropriations decreased to 9,4 million euro or 11,6 % (2012: 16,3 million euro or 19,6 %). However, carry-overs of committed appropriations were still high for Title II (administrative expenditure) with 3,0 million euro or 41 % (2012: 4,2 million euro or 49 %). They mainly related to planned modifications of the building late in the year (1,8 million euro) and other administrative costs for which invoices had not been received at year end.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

13.

An overview of the corrective actions taken in response to the Court’s comments from previous years 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 121, 15.5.2009, p. 37.

(2) Annex II summarises the Office’s competences and activities. It is presented for information purposes.

(4) These comprise 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).

(7) Article 107 of Regulation (EU) No 1271/2013.

ANNEX I

Follow-up of previous years’ 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.	Completed
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.	N/A
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.	Procedures: Completed Level of exceptions and deviations: 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.	Completed
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.	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.	N/A
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.	Completed
2012	The Office carried over 1,2 million euro for changes to the Office’s building in connection with setting up the European cybercrime 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.	Completed
2012	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.	Completed
2012	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.	Completed
2012	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 cybercrime centre. The implementation of this task resulted in significant budgetary commitments made close to year-end and affected the amount carried over to 2013.	N/A
2012	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 cybercrime centre.	Completed
2012	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 shortlisting was set before the examination of the applications; selection boards did not appropriately document all their meetings and decisions.	Completed

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’.

Competences of the Office

(Council Decision 2009/371/JHA establishing the European Police Office (Europol) (ECD))

Competence

Europol’s competence covers 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 also covers related criminal offences as defined in Article 4(3) ECD.

Principal tasks

—	To collect, store, process, analyse and exchange information and intelligence.

—	To notify the competent Member State authorities without delay via the national unit referred to in Article 8 of information concerning them and of any connections identified between criminal offences.

—	To aid investigations in the Member States, in particular by forwarding all relevant information to the national units.

—	To ask the competent authorities of the Member States concerned to initiate, conduct or coordinate investigations and to suggest the setting up of joint investigation teams in specific cases.

—	To provide intelligence and analytical support to Member States in connection with major international events.

—	To prepare threat assessments, strategic analyses and general situation reports relating to its objective, including organised crime threat assessments.

—	To provide support to Member States in their tasks of gathering and analysing information from the Internet in order to assist in the identification of criminal activities facilitated by or committed using the Internet.

Additional tasks

—	To develop specialist knowledge of the investigative procedures of the competent authorities of the Member States and to provide advice on investigations.

—	To provide strategic intelligence to assist and promote the efficient and effective use of the resources available at national and Union level for operational activities and the support of such activities.

Additionally, to assist Member States through support, advice and research in the following areas

—	the training of members of their competent authorities, where appropriate in cooperation with the European Police College,

—	the organisation and equipment of those authorities by facilitating the provision of technical support between the Member States,

—	crime prevention methods,

—	technical and forensic methods and analysis, and investigative procedures.

Europol also acts 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 also processes and transfers 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 the purposes of the ‘Terrorist Finance Tracking Program’ (TFTP).

Europol also continues 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.

Europol also supports the EU Policy Cycle for serious and organised crime and Empact (1) projects in line with the Council’s conclusions on the creation and implementation of an EU policy cycle for organised and serious international crime and the Council’s subsequent conclusions of 27 May 2011 on setting the EU’s priorities for the fight against organised crime between 2011 and 2013.

Europol also hosts the European Cybercrime Centre (EC3) and acts 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’.

Governance

Management Board

The Management Board is composed of one representative of each Member State and one representative of the Commission.

Director

—	Is appointed by the Council, acting by qualified majority, from a list of at least three candidates presented by the Management Board, for a four-year period (may be extended once for not more than four years).

—	Is assisted by three Deputy Directors appointed for a four-year period (extendable once).

—	Leads Europol and is accountable to the Management Board in respect of the performance of his or her duties.

—	Is Europol’s legal representative.

External audit

European Court of Auditors.

Internal audit

—	European Commission’s Internal Audit Service (IAS);

—	Internal Audit Function (IAF).

Data protection and safeguarding of personal rights

—	Joint Supervisory Body (JSB);

—	Data Protection Officer (DPO)

Discharge authority

European Parliament, taking into account a recommendation from the Council, acting by qualified majority.

Resources made available to the Office in 2013 (2012)

Final budget 2013

82,5(84,2) million euro

Staff in 2013

—	Temporary staff: 457 (457) in establishment plan. Actual number in post on 31 December 2013 = 426

—	Seconded National Experts: 34 (37) (actual year-end number)

—	Contract staff: 94 (94) (actual year-end number)

Products and services in 2013 (2012)

Europol as the principal EU support centre for law enforcement operations

Operational support to operations and Joint Investigation Teams (JITs) includes: data processing, cross-match reports, intelligence notifications, technical/forensic support and expertise, mobile office deployments, analysis reports, operational coordination at Europol HQ, operational meetings, financial assistance, etc. Once more, the amount of operational support provided to Member States had increased; this confirms the growing trend which has been evident in previous years in the number of requests for all Europol services:

—	18 310 cross-border cases supported, an increase of 15 % on 2012 (15 949),

—	684 investigations in the Member States actively supported by Europol focusing on prioritised crime areas,

—	2 250 operational reports produced in 2013 compared to 2 141 in 2012 (incl. cross-match reports, operational analysis reports, intelligence notifications and technical ad hoc analysis reports),

—	Lead investigator(s) of operations in the Member States and Member States’ experts expressed a high level of satisfaction with the operational support provided by Europol,

—	Europol financially supported 214 operational meetings and 36 Empact meetings,

—	39 euro counterfeiting investigations were financially supported by Europol,

—	41 (30) Joint Investigation Teams were supported by Europol as a full member,

—

EC3 supported various successful operational actions with Member States and third countries including the private sector (e.g. disruption of global credit card fraud networks, involving 15 000 compromised credit cards and two skimming factories; joint operational actions against global online child sexual exploitation activities; and dismantling of a botnet infecting almost 2 million computers),

—	Implementation of TFTP Agreement Articles 4, 9, 10 by processing all related US requests and information leads.

Strategic analysis capability

Strategic products including threat assessments and situation reports

—

38 strategic reports on organised crime and 14 strategic reports on terrorism were produced including the Serious and Organised Crime Threat Assessment (SOCTA), a threat assessment for each Empact priority (Policy Cycle 2013-2017), ad hoc strategic reports on newly identified emerging threats, joint EMCDDA (2)-Europol reports, strategic assessments on cybercrime, EU Terrorism Situation and Trend Report (TE-SAT), and a situation report on travel for terrorist purposes.

Europol as the EU criminal information hub

Information management capabilities, Secure Information Exchange Network Application (SIENA), Europol Information System (EIS), Liaison Bureaux network.

—	In total, 4 56 598 operational messages were exchanged via SIENA between Europol, Member States and Third Parties, a 10 % increase compared to 2012 (4 14 334).

—	At the end of 2013, 67 % of all SIENA messages were shared with Europol.

—	The EIS contained 2 45 142 (1 86 896) records at the end of 2013 with an increasing proportion of person records (the most important and valuable variety of records from a law enforcement point of view).

—	By the end of 2013, 21 Member States’ national asset recovery offices were linked to SIENA. Europol supported 93 organised crime related asset tracing requests in 2013.

—

A unique network of almost 165 liaison officers ensures a live link between Europol headquarters in The Hague and 28 Europol National Units in the national capitals of the Member States. They facilitate the exchange of information and provide support and coordination for ongoing investigations. Europol also hosts liaison officers from 10 non-EU countries and organisations who work together with Europol on the basis of cooperation agreements. In addition, Europol has seconded two liaison officers to Washington (USA) and one to Interpol’s headquarters in Lyons (France).

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:

—	32 expert areas covered by Europol Platform for Experts including 4 419 active accounts (25 platforms and 2 663 users at the end of 2012);

—	Europol supported the delivery of 83 training courses (organised by Europol, CEPOL or MS);

—	the annual large-scale European Police Conference was organised at Europol Headquarters.

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.

—	21 strategic agreements and 11 operational agreements in place at the end of 2013 (18 non-EU countries, 11 EU bodies and agencies and three other international organisations, including Interpol).

—	Information exchange with external partners (8 663) increased slightly compared to 2012 (8 547).

—	In total, eight operational cooperation partners and five strategic cooperation partners have direct access to SIENA.

(1) European Multidisciplinary Platform against Criminal Threats (Empact)

(2) European Monitoring Centre for Drugs and Drug Addiction (EMCDDA)

Source: Annex supplied by the Office.

THE OFFICE’S REPLIES

11.

Europol acknowledges the comment by the ECA which relates to three individual tender procedures. In Q1 2014, next to the ECA findings, Europol initiated an organisational-wide review of the overall procurement process (in particular regarding the key stages of tendering, contracting and monitoring of contracts), with a view to refining the current internal organisational set-up and the underlying processes (including respective quality controls).

12.	Europol acknowledges the ECA’s comment on the high level of carry forward appropriations for administrative expenditure and will continue its efforts to reduce future carry forwards as much as possible.

10.12.2014

Official Journal of the European Union

C 442/301

REPORT

on the annual accounts of the European Union Fundamental Rights Agency for the financial year 2013, together with the Agency’s replies

(2014/C 442/35)

INTRODUCTION

The European Union Fundamental Rights Agency (hereinafter ‘the Agency’, aka ‘FRA’), which is located in Vienna, was established by Council Regulation (EC) No 168/2007 (1). The objective of the Agency is to provide the relevant authorities of the Union and its Member States with assistance and expertise when implementing Union law relating to fundamental rights (2).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Agency, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013, and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Agency and the legality and regularity of the underlying transactions (5):

(a)

(b)

The auditor’s responsibility

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 Agency are free from material misstatement and the transactions underlying them are legal and regular.

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

Opinion on the legality and regularity of the transactions underlying the accounts

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2013 are legal and regular in all material respects.

10.	The comments which follow do not call the Court’s opinions into question.

COMMENTS ON BUDGETARY MANAGEMENT

11.

In 2013, the overall level of committed appropriations was 100 %, indicating that commitments were made in a timely manner. However the level of committed appropriations carried over to 2014 was high at 5 79 429 euro (27 %) for title II (administrative expenditure) and 5 6 25 444 euro (69 %) for title III (operating expenditure).

12.

The amounts carried over under title II mainly relate to the planned purchase of IT goods and services. The carry-overs under title III mainly reflect the multi-annual nature of the Agency’s operational projects, where payments are made according to planned schedules.

FOLLOW-UP OF PREVIOUS YEAR’S COMMENTS

13.

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 53, 22.2.2007, p. 1.

(2) Annex II summarises the Agency’s competences and activities. It is presented for information purposes.

(4) These comprise the budgetary outturn account and the annex to the budgetary outturn account.

(5) Article 39 and 50 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).

(7) Article 107 of 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	In 2012, the Agency procured cleaning services via cascading framework contracts to two suppliers. Due to a clerical error during the evaluation of offers, the ranking of the contractors was incorrect. One specific contract for 56 784 euro awarded in 2012 and the related payments are irregular. Following the Court’s audit, the Agency has amended the ranking of the contractors accordingly.	Completed
2012	The Agency did not have a formal ex post verification procedure in place during 2012. A formal procedure was however implemented at the beginning of 2013, following a comprehensive risk analysis conducted by the Agency.	Completed
2012	While budget implementation for title III (operational expenditure) was low at 49 % of committed appropriations, this did not arise from delays in the implementation of the Agency’s Annual Work Programme and reflects the multi-annual nature of activities. The Agency has adopted a budgetary planning module that is linked directly to its Annual Work Programme and payments were planned and executed according to operational needs.	N/A

ANNEX II

European Union Agency for Fundamental Rights (Vienna)

Competences and activities

Areas of Union competence deriving from the Treaty

Collection of information

—	The Commission may, within the limits and under conditions laid down by the Council acting by a simple majority in accordance with the provisions of the Treaties, collect any information and carry out any checks required for the performance of the tasks entrusted to it. (Article 337).

Competences of the Agency

(Council Regulation (EC) No 168/2007)

Objectives

—

To provide the relevant institutions, bodies, offices and agencies of the Union and its Member States when implementing Union law with assistance and expertise relating to fundamental rights in order to support them when they take measures or formulate courses of action within their respective spheres of competence to fully respect fundamental rights.

Tasks

—	To collect, record, analyse and disseminate relevant, objective, reliable and comparable information and data;

—	to develop methods and standards to improve the comparability, objectivity and reliability of data at European level;

—	to carry out, cooperate with or encourage scientific research and surveys, preparatory studies and feasibility studies;

—	to formulate and publish conclusions and opinions on specific thematic topics, for the Union institutions and the Member States when implementing Union law;

—	to publish an annual report on fundamental-rights issues covered by the areas of the Agency's activity;

—	to publish thematic reports based on its analysis, research and surveys;

—	to publish an annual report on its activities;

—	to develop a communication strategy and promote dialogue with civil society, in order to raise public awareness of fundamental rights and actively disseminate information about its work.

Governance

Management Board

Composition

One independent person appointed by each Member State, one independent person appointed by the Council of Europe and two representatives of the Commission.

Duties

To adopt the budget, work programme and annual reports. To adopt the final budget and the establishment plan. To give an opinion on the final accounts.

Executive Board

Composition

—	Chairperson of the Management Board.

—	Vice-Chairperson of the Management Board.

—	one representative of the Commission.

—	Two other elected members from the Management Board.

—	The person appointed by the Council of Europe in the Management Board may participate in the meetings of the Executive Board.

Scientific Committee

Composition

—	11 independent persons, highly qualified in the field of fundamental rights, appointed by the Management Board following a transparent call for applications and selection procedure.

Director

Appointed by the Management Board on a proposal from the Commission and after opinions of the European Parliament and the Council of the European Union (who will state their preference).

External audit

European Court of Auditors.

Internal audit

European Commission's Internal Audit Service (IAS).

Discharge authority

European Parliament on a recommendation from the Council.

Resources made available to the Agency in 2013 (2012)

Final Budget

21,620(20,376) million euro of which the Union subsidy is 99 % (99 %)

Staff as at 31 December 2013

78 (72) posts in the establishment plan, of which occupied: 75 (70) +

38 (22) other staff (contract staff, seconded national experts)

Total staff: 116 (94), undertaking the following tasks:

—	operational: 75 (58)

—	administrative: 33 (29)

—	mixed: 8 (7)

Products and services 2013 (2012)

FRANET

Number of contributions by the 28 contractors (national lots): 403 (185)

Number of contributions by the partner in charge of the EU International Analysis: 1 (1)

Number of contributions by the partner in charge of the Comparative Analysis: 2 (1)

Number of meetings: 3 (3) (one with 4 participants, one with 10 participants and one with 2 participants)

Research Reports

Number of reports: 19 (13) plus 12 (23) language versions

Number of meetings: 1 (2)

Annual reports: 2 (2) plus 2 (3) language versions

Annual Report Summary: 1 (1) plus 2 (2) language versions

FRA opinions: 2 (3)

E-book FRA Annual Report 2012: 1 (0) plus 1 (0) language versions

Factsheets: 4 (11) plus 71 (118) language versions

Non-Research Materials

Various FRA publications: 20 (5) plus various (31) language versions

Posters: 15 (20)

Key Conferences and Events

Fundamental Rights Conference: 1 (1)

Diversity Day Event: 0 (1)

FRA Symposium: 1 (1)

Meeting of Fundamental Rights Platform: 1 (1)

Joint Seminar with (Irish) EU Presidency 1 (1)

Cooperation with institutions and bodies at EU and Member State level

Member States: 29 (7)

Council of the EU: 19 (9)

European Commission: 22 (12)

European Parliament: 15 (20)

EU external action service: 4 (-)

EU Agencies and other bodies: 23 (-)

European Court of Justice: 2 (1)

Committee of the Regions: 1 (1)

European Economic and Social Committee: 0 (1)

European Ombudsman: 2 (1)

Fundamental Rights Platform: 3 (3)

Council of Europe: 25 (24)

OSCE: 4 (2)

United Nations: 9 (2)

Specialised Bodies (NHRIs and Equality Bodies): 8 (3)

Other Meetings and Round Tables: 7 (12)

Source: Annex supplied by the Agency.

THE AGENCY’S REPLIES

11 and 12.

At the beginning of year, the Agency plans the carry overs for the following year and closely monitors their evolution. The level of cancellations (less than 2 %) is an indicator of the precise planning and management of the carry overs.

The Agency’s consumption of its EU subsidy over the past two budget years has been in excess of 99 % demonstrating an excellent budgetary management.

10.12.2014

Official Journal of the European Union

C 442/308

REPORT

on the annual accounts of the European Agency for the Management of Operational Cooperation at the External Borders of the Member States for the financial year 2013, together with the Agency’s replies

(2014/C 442/36)

INTRODUCTION

The European Agency for the Management of Operational Cooperation at the External Borders of the Member States (hereinafter ‘the Agency’, aka ‘Frontex’), which is located in Warsaw, was created by Council Regulation (EC) No 2007/2004 (1). The Agency's task is to coordinate the Member States’ activities in the field of the management of external borders (support for operational cooperation, technical and operational assistance, and risk analysis) (2).

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)	the annual accounts of the Agency, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2013; and

(b)	the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management is responsible for the preparation and fair presentation of the annual accounts of the Agency and the legality and regularity of the underlying transactions (5):

(a)

(b)

The auditor’s responsibility

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 Agency are free from material misstatement and the transactions underlying them are legal and regular.

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

Basis for a qualified opinion on the legality and regularity of the transactions underlying the accounts

In 2013, expenditure related to grants amounted to 32 million euro, representing 39 % of total expenditure. In order to verify the expenditure claimed by cooperating countries, the Agency performed reasonableness checks prior to payment for all types of financed operations (joint return operations and joint land/sea/air operations). Documentation supporting the cooperating countries’ entitlements has usually been requested for joint return operations, but not for joint land/sea/air operations implemented under grant agreements signed before June 2013.

10.

Transactions in relation to joint land/sea/air operations represented 23 million euro or 28 % of total 2013 expenditure. Although a more comprehensive system of ex ante verifications was introduced for grant agreements signed since June 2013, the majority of 2013 transactions resulted from grant agreements signed before that date.

11.

The Agency carries out ex post controls on grants which cover transactions from previous years. None of the 2013 grant transactions was subject to this cycle of ex post controls.

12.

In the absence of sufficient appropriate audit evidence on the effectiveness of ex ante verifications and ex post verifications on 2013 transactions there is insufficient assurance as to the legality and regularity of the 2013 grant transactions related to joint land/sea/air operations.

Qualified opinion on the legality and the regularity of the transactions underlying the accounts

13.

In the Court’s opinion, except for the matters described in paragraphs 9 to 12, the transactions underlying the annual accounts of the Agency for the period from 1 January to 31 December 2013 are legal and regular in all material respects.

14.	The comments which follow do not call into question the Court’s opinion on the reliability of the accounts or its qualified opinion on the legality and regularity of the underlying transactions.

COMMENTS ON THE RELIABILITY OF THE ACCOUNTS

15.

Suppliers’ statements at year-end were reconciled with considerable difficulty. There is a need to monitor supplier balances more regularly and to analyse differences in a more timely manner.

COMMENTS ON BUDGETARY MANAGEMENT

16.

Some 32 million euro or 35 % of committed 2013 appropriations were carried over to 2014. Although the multiannual nature of the Agency’s operations and the heightened risk of unforeseen events represent a particular challenge in respect of annual budget planning and implementation, there is still scope for improved budget monitoring to help reduce the level of carry-overs.

17.

The carry-overs include global commitments of 5,2 million euro, which are the leftover balance of an 8,2 million euro additional subsidy made available by the budgetary authorities towards the end of 2013 to deal with unforeseen and urgent operational needs. Although the global commitment was made to cover the related operations in 2014, the Agency’s Financial Regulation does not provide a clear basis for such carry-overs.

18.

In 2013, 29 budgetary transfers amounting to 12,2 million euro were made. This is partly due to the fact that funds needed for operations had been transferred from other budget lines until the additional subsidies were made available.

OTHER COMMENTS

19.

Frontex became operational in 2005 and has, to date, worked on the basis of correspondence and exchanges with the host Member State. However a comprehensive headquarters agreement between the Agency and the Member State has not been signed. Such an agreement would further promote transparency in respect of the conditions under which the Agency and its staff operate.

FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS

20.

An overview of the corrective actions taken in response to the Court's comments from previous years is provided in Annex I.

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 349, 25.11.2004, p. 1.

(2) Annex II summarises the Agency's competences and activities. It is presented for information purposes.

(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).

(7) Article 107 of Regulation (EU) No 1271/2013.

ANNEX I

Follow-up of previous years’ comments

Year	Court’s comment	Status of corrective action (Completed/Ongoing/Outstanding/N/A)
2011	As in the previous year, the level of carry-overs is excessive and at odds with the budgetary principle of annuality.	Ongoing
2011	Within the total amount carried over, the Agency carried over global commitments of 5,1 million euro. The Agency’s Financial Regulation however does not provide a clear basis for such a carry-over (1).	Ongoing
2011	In 2011, the Agency financed grants for joint operations amounting to 74 million euro. In order to verify the expenditure claimed by the beneficiaries (Member States and Schengen Associated Countries), the Agency, although it performs reasonableness checks, does not usually request supporting documentation that would address the risk of ineligible expenditure.	Ongoing
2011	Internal control weaknesses were identified as regards the management of fixed assets. There is no procedure related to the disposal of fixed assets and the physical inventory is incomplete.	Completed
2012	The physical inventory was incomplete and did not cover all assets owned by the Agency. Assets under construction and assets purchased near year-end were not taken into account.	Completed
2012	There is no procedure for the disposal of fixed assets. Fixed assets no longer in use are written off from the fixed assets register without being physically disposed of. No register of these assets is kept.	Completed
2012	Weaknesses were still noted in the system for reconciling suppliers’ statements with the corresponding records at the Agency.	Ongoing
2012	The Agency’s 2012 budget amounted to 89,6 million euro of which 21,8 million euro (25 % of committed appropriations) were carried over to 2013. Carry-overs related to Title III (operational expenditure) amounted to 19,6 million euro. Such a high level of carry-overs is excessive and at odds with the budgetary principle of annuality, although it is partly related to the operational, multiannual nature of the Agency’s activities. By the end of February 2013, 1,1 million euro of these carry-overs had been cancelled.	Ongoing
2012	The Agency made 39 budgetary transfers amounting to 11,5 million euro in 2012, affecting 70 of the 79 budget lines. This is partly due to the fact that the second budgetary amendment for 2012 was only approved in October 2012 and the funds needed for operations had meanwhile been transferred from other budget lines.	Completed
2012	The recruitment procedures examined showed significant shortcomings affecting transparency and the equal treatment of candidates: 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; the Selection Board did not document all its meetings and decisions.	Ongoing

(1) The Agency Financial Regulation states in its Article 62(2) that ‘Global budget commitments shall cover the total cost of the corresponding individual legal commitments concluded up to 31 December of year N+1’. Both the EU Financial Regulation and the Agency Financial Regulation are however unclear concerning the use of global commitments for non differentiated appropriations. The Agency used global commitments to justify an automatic carry-over of non-differentiated appropriations.

ANNEX II

European Agency for the Management of Operational Cooperation at the External Borders (Warsaw)

Competences and activities

Areas of Union competence deriving from the Treaty

Articles 74 and 77(2)(b) and (d) of the Treaty on the Functioning of the European Union

Article 74: ‘The Council shall adopt measures to ensure administrative cooperation between the relevant departments of the Member States in the areas covered by this title, as well as between those departments and the Commission. (...)’

Article 77(2): ‘(…) the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall adopt measures concerning:

(…) (b)

the checks to which persons crossing external borders are subject; (…)

(…) (d)

any measure necessary for the gradual establishment of an integrated management system for external borders (…)’.

Competences of the Agency

Council Regulation (EC) No 2007/2004, amended by Regulation (EC) No 863/2007 and Regulation (EU) No 1168/2011 of the European Parliament and of the Council

The last amendment entered into force on 12 December 2011; the content of the table reflects the situation after this last amendment.

Objectives

Frontex was established with a view to improving the integrated management of the external borders of the Member States of the EU.

Main Tasks

(a)	To coordinate operational cooperation between Member States in the field of management of external borders;

(b)	to assist Member States on training of national border guards and establish common training standards;

(c)	to carry out risk analyses, including the assessment of the capacity of Member States to face threats and pressures at the external borders;

(d)	to participate in the development of research relevant for the control and surveillance of external borders;

(e)	to assist Member States in circumstances requiring increased technical and operational assistance, especially those Member States facing specific and disproportionate pressures;

(f)	to provide Member States with the necessary support including, upon request, coordination or organisation of joint return operations;

(g)	to set up European Border Guard Teams (EBGT) to be deployed during joint operations, pilot projects and rapid interventions;

(h)	to develop and operate information systems for information exchange, including ICOnet;

(i)	to provide necessary assistance to the development and operation of a European border surveillance system (Eurosur).

Governance

Management Board

Composition

One representative of each Member State (MS) + two representatives of the Commission + one representative per Schengen Associated Country (SAC).

Tasks

(a)	To appoint the Executive Director;

(b)	to adopt the general report of the Agency;

(c)	to adopt the Agency’s programme of work;

(d)	to establish procedures for taking decisions related to the operational tasks of the Agency;

(e)	to carry out its functions relating to the Agency’s budget;

(f)	to exercise disciplinary authority over the (Deputy) Executive Director;

(g)	to establish its Rules of Procedure;

(h)	to establish the organisational structure of the Agency and adopt the Agency’s staff policy;

(i)	to adopt the Agency’s multiannual plan.

Executive Director

Appointed by the Management Board on a proposal from the Commission.

External audit

European Court of Auditors.

Discharge authority

European Parliament acting on a recommendation of the Council.

Resources made available to the Agency in 2013 (2012)

Final Budget

93,95(89,6) million euro

Union subsidy 87,7(84) million euro

Staff as at 31 December 2013

Establishment plan

Temporary staff planned: 153 (143) — Temporary staff posts occupied: 142 (137)

		ISSN 1977-091X
Official Journal of the European Union		C 442

English edition	Information and Notices	Volume 57 10 December 2014

Notice No	Contents	page
	IV Notices
	NOTICES FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES
	Court of Auditors
2014/C 442/01	Summary of the results of the Court’s 2013 annual audits of the European Agencies and other bodies	1

2014/C 442/02	Report on the annual accounts of the Agency for Cooperation of Energy Regulators for the financial year 2013, together with the Agency’s replies	18

2014/C 442/03	Report on the annual accounts of the Office of the Body of European Regulators for Electronic Communications for the financial year 2013, together with the Office’s replies	28

2014/C 442/04	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	35

2014/C 442/05	Report on the annual accounts of the European Centre for the Development of Vocational Training for the financial year 2013, together with the Centre’s reply	42

2014/C 442/06	Report on the annual accounts of the European Police College for the financial year 2013, together with the College’s replies	51

2014/C 442/07	Report on the annual accounts of the Community Plant Variety Office for the financial year 2013, together with the Office’s reply	61

2014/C 442/08	Report on the annual accounts of the Education, Audiovisual and Culture Executive Agency for the financial year 2013 together with the Agency’s reply	67

2014/C 442/09	Report on the annual accounts of the Executive Agency for Competitiveness and Innovation for the financial year 2013, together with the Agency’s replies	74

2014/C 442/10	Report on the annual accounts of the Executive Agency for Health and Consumers for the financial year 2013, together with the Agency’s replies	83

2014/C 442/11	Report on the annual accounts of the European Aviation Safety Agency, for the financial year 2013 together with the Agency’s replies	93

2014/C 442/12	Report on the annual accounts of the European Asylum Support Office for the financial year 2013, together with the Office’s replies	102

2014/C 442/13	Report on the annual accounts of the European Banking Authority for the financial year 2013, together with the Authority’s replies	112

2014/C 442/14	Report on the annual accounts of the European Centre for Disease Prevention and Control for the financial year 2013, together with the Centre’s replies	123

2014/C 442/15	Report on the annual accounts of the European Chemicals Agency for the financial year 2013, together with the Agency’s replies	132

2014/C 442/16	Report on the annual accounts of the European Environment Agency for the financial year 2013, together with the Agency’s replies	144

2014/C 442/17	Report on the annual accounts of the European Fisheries Control Agency for the financial year 2013, together with the Agency’s replies	152

2014/C 442/18	Report on the annual accounts of the European Food Safety Authority for the financial year 2013, together with the Authority’s replies	160

2014/C 442/19	Report on the annual accounts of the European Institute for Gender Equality for the financial year 2013, together with the Institute’s reply	167

2014/C 442/20	Report on the annual accounts of the European Insurance and Occupational Pensions Authority for the financial year 2013, together with the Authority’s replies	174

2014/C 442/21	Report on the annual accounts of the European Institute of Innovation and Technology for the financial year 2013, together with the Institute’s replies	184

2014/C 442/22	Report on the annual accounts of the European Medicines Agency for the financial year 2013, together with the Agency’s reply	193

2014/C 442/23	Report on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the financial year 2013, together with the Centre’s replies	201

2014/C 442/24	Report on the annual accounts of the European Maritime Safety Agency for the financial year 2013, together with the Agency’s reply	210

2014/C 442/25	Report on the annual accounts of the European Union Agency for Network and Information Security for the financial year 2013, together with the Agency’s replies	217

2014/C 442/26	Report on the annual accounts of the Europol Pension Fund for the financial year 2013, together with the Fund’s replies	228

2014/C 442/27	Report on the annual accounts of the European Railway Agency for the financial year 2013, together with the Agency’s replies	232

2014/C 442/28	Report on the annual accounts of the European Research Council Executive Agency for the financial year 2013, together with the Agency’s reply	240

2014/C 442/29	Report on the annual accounts of the European Securities and Markets Authority for the financial year 2013, together with the Authority’s replies	247

2014/C 442/30	Report on the annual accounts of the European Training Foundation for the financial year 2013, together with the Foundation’s reply	260

2014/C 442/31	Report on the annual accounts of the Euratom Supply Agency for the financial year 2013, together with the Agency’s replies	267

2014/C 442/32	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	275

2014/C 442/33	Report on the annual accounts of Eurojust for the financial year 2013, together with Eurojust’s replies	282

2014/C 442/34	Report on the annual accounts of the European Police Office for the financial year 2013, together with the Office’s replies	290

2014/C 442/35	Report on the annual accounts of the European Union Fundamental Rights Agency for the financial year 2013, together with the Agency’s replies	301

2014/C 442/36	Report on the annual accounts of the European Agency for the Management of Operational Cooperation at the External Borders of the Member States for the financial year 2013, together with the Agency’s replies	308

2014/C 442/37	Report on the annual accounts of the European GNSS Agency for the financial year 2013, together with the Agency’s replies	318

2014/C 442/38	Report on the annual accounts of the European Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice (eu-LISA) for the financial year 2013, together with the Agency’s replies	326

2014/C 442/39	Report on the annual accounts of the Office for Harmonization in the Internal Market for the financial year 2013, together with the Office’s replies	332

2014/C 442/40	Report on the annual accounts of the European Agency for Safety and Health at Work for the financial year 2013, together with the Agency’s reply	340

2014/C 442/41	Report on the annual accounts of the Research Executive Agency for the financial year 2013, together with the Agency’s reply	351

2014/C 442/42	Report on the annual accounts of the Trans-European Transport Network Executive Agency for the financial year 2013, together with the Agency’s replies	358