1.12.2016   

EN

Official Journal of the European Union

C 449/1

1.

Pursuant to Article 287 of the Treaty on the Functioning of the European Union (1), the European Court of Auditors (Court) has audited and issued opinions on the reliability of the accounts and on the legality and regularity of the underlying transactions, for the financial year ended 31 December 2015 for 41 agencies, offices and bodies (agencies) and the Europol Pension Fund (EPF).

3.

Agencies are highly visible in the Member States and 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. Depending on their task, set-up and financing, distinction can be made between decentralised agencies, executive agencies, self-financed agencies and other bodies.

4.

The 30 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 policy-making 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.

5.

The six executive agencies are entrusted with tasks relating to the management of one or more Union programmes and are set up for fixed periods of time. They are located in Brussels (five) and Luxembourg (one).

6.

The three self-financed agencies comprise the Office for Harmonization in the Internal Market (OHIM) (2), the Community Plant Variety Office (CPVO) and the Single Resolution Board (SRB) (3). The SRB in Brussels became fully operational as of 1 January 2016 with the mission to ensure the orderly resolution of failing banks, minimising the impact on the real economy and on public finances.

7.

The other bodies comprise the European Institute of Innovation and Technology (EIT), the Euratom Supply Agency (Euratom) and the Europol Pension Fund (EPF). The EIT in Budapest is an independent, decentralised EU body which pools scientific, business and education resources to boost the Union’s innovation capacity. The Euratom in Luxembourg was created to support the aims of the European Atomic Energy Community Treaty. The EPF, which is located in The Hague, was established to finance and pay pensions for staff employed by the European Police Office (Europol) before it became an agency on 1 January 2010. The EPF has been dissolved as of 1 January 2016.

8.

The agencies’ total 2015 budget amounted to some 2,8 billion euros (2014: 2,6 billion euros) or about 2,0 % of the 2015 EU general budget (2014: 1,9 %). The major part of the agencies’ budget is funded through the Commission’s subsidies; the rest is income from fees and other sources.

9.

By the end of 2015 the agencies employed 9 965 staff (2014: 9 379) (4). The number of staff increased the most in agencies dealing with migration matters (European Asylum Support Office — EASO) and the prevention of serious crime and terrorism (Europol). The executive agencies where the staff number went up have an extended mandate and obtained additional responsibilities.

10.

Details on the agencies, their budgets and staff are provided in Annex I.

11.

The arrangements for the audit of agencies’ accounts are presented in the Table.

Table

Audit arrangements for agencies’ accounts

12.

The annual accounts of 32 agencies were verified by an independent external auditor (audit firm) according to Article 208(4) of the EU Financial Regulation (7) and Article 107(1) of the framework financial Regulation for agencies (8). The Court’s opinions on these accounts considered the audit work performed by the audit firm and the action taken in response to their observations. The Court has reviewed the work of the audit firms in accordance with international audit standards. This review provided adequate assurance for the Court to base its own audit opinions on the reliability of the accounts using the audit firms’ work.

13.

For the remaining nine agencies and the EPF, the Court continued to perform the audit of the reliability of the accounts. The audit work covered compliance with the applicable accounting rules, completeness and accuracy of balance-sheet and budget figures and an analysis of the statement of financial performance and of the budget implementation.

14.

As in prior years the Court remained exclusively responsible for the audit of the legality and regularity of the transactions underlying the accounts of all agencies and the EPF. The audit approach comprised analytical audit procedures, direct testing of transactions and an assessment of the agencies’ internal controls.

15.

The final accounts of 40 agencies and the EPF present fairly, in all material respects, their financial position as at 31 December 2015 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.

16.

The Court issued a qualified opinion on the reliability of Frontex’ final accounts for the financial year 2015. The qualification is based on a material underestimation of accrued charges by 1,7 million euros.

17.

The Court concluded that for the 40 agencies and the EPF, the transactions underlying the annual accounts for the year ended 31 December 2015 were legal and regular in all material respects.

18.

The Court issued a qualified opinion on the legality and regularity of the transactions underlying the EIT’s accounts. The qualification was primarily based on the use of an irregular flat rate related to grants.

19.

The Court presented an event that took place after balance sheet date in an ‘Other matter’ paragraph in the SARs of the European Banking Authority (EBA) and of the European Medicines Agency (EMA), which are both located in London. This paragraph deals with the United Kingdom (UK) referendum that took place on 23 June 2016 and clarifies that the accounts and related notes of the two agencies were prepared using the information available at the date of signing of their accounts when the result of UK citizens’ vote were not yet known and the formal notification of the triggering of Article 50 of the Treaty on European Union has not been presented (9).

20.

Without calling its opinions into question, the Court made a total of 90 comments (2014: 79) affecting 36 agencies and the EPF (2014: 35) to highlight matters of importance and to indicate room for improvement. The number of comments made under the different headings of the SARs is shown in the Chart.

Chart

Comments by SAR heading

Source: SARs on the agencies annual accounts for the financial year 2015

21.

An overview of the comments made for each of the agencies and the EPF is provided in Annex II.

22.

The comments considered to be of particular interest are outlined below. They cover matters of importance which are frequent and/or severe and of wider interest (‘lessons to be learnt’).

23.

A high level of carry-overs of committed appropriations remains the most frequent comment and concerns 32 agencies (2014: 28). The carry-overs under title II (administrative expenditure) of the 22 agencies concerned (2014: 18) on average amounted to 36 % (2014: 39 %) of committed appropriations, carry-overs under title III (operational expenditure) of the 18 agencies concerned (2014: 18) on average amounted to 48 % (2014:56 %) of committed appropriations. These carry-overs mainly result from events (partly) beyond the agencies’ control (e.g. invoices or cost declarations that had not been received by the year end) or are explained by the multi-annual nature of operations, procurement procedures or projects. The Court continued to report on these matters following its internally defined threshold for the different titles of the agencies’ budget. A change of this reporting procedure requires a common understanding of the main parties involved (Court, Parliament, Council and the agencies) as to what should be reported in the agencies’ SARs on carry-overs. In this context it would be beneficial to elaborate an agreed upon concept of a ‘justified carry-over’ and to implement this concept in the agencies.

24.

The basic rule underlying public procurement is to ensure competition between economic operators. The Court reported in four SARs that agencies had not fully complied with this rule. It referred to the use going beyond of what can be considered exceptional of a negotiated procedure without publication of a contract notice and highlighted the absence of competition in case of the use of framework contracts where the services requested or individual prices have not been clearly defined.

25.

Business continuity encompasses planning and preparation to ensure the continuation of operations in case of serious incidents or disasters and the ability to recover to an operational state within a reasonably short period. The Court found that four agencies do not yet fully comply with the internal control standard dealing with this matter.

26.

The agencies’ audited annual accounts comprise the financial statements and the budgetary implementation reports. The Court reported that the budgetary implementation reports of three agencies differ from the level of detail provided by most other agencies which hampers comparison between agencies and affects their informative value. The Commission has planned to issue guidelines on this matter.

27.

The SARs for financial year 2015 provide an overview of follow-up actions taken by the agencies in response to comments from previous years. Annex III shows that for the 134 comments open at the end of 2014 (2013: 153), corrective action was completed in 37 cases during 2015. The corrective actions were ongoing for 44 cases and outstanding for nine cases. No corrective action was required for 44 comments, mainly in relation to carry-overs of committed appropriations.

28.

Whilst the overall situation has improved compared to the previous year (number of open comments decreased) the number of outstanding corrective actions increased by three comments. An outstanding action implies that no action is planned or ongoing. In five of the nine cases, the implementation of the required corrective actions depends on the contribution of a third party (e.g. the hosting Member State, a Court or the legislator) and is beyond the agencies’ control. In three of the remaining four comments, the agencies concerned (CPVO and EASO) have not yet taken effective action and in one case, the agency (EIT) does not agree with the Court’s observation and has not planned any further specific corrective actions.

29.

The Court issued an unqualified opinion on the annual accounts of all agencies except Frontex. The transactions underlying the agencies’ accounts were legal and regular for all agencies except for EIT for which the Court has issued a qualified opinion.

30.

Agencies further improved their procedures by taking corrective action in response to the Court’s comments from previous years. Nevertheless, there is still room for improvement, as indicated by comments made in 2015.

1.12.2016   

EN

Official Journal of the European Union

C 449/17

1.

The Agency for the 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 additional responsibilities, together with national regulatory authorities, regarding the monitoring of the European wholesale energy market.

2.

The table presents key figures for the Agency (3).

Table

Key figures for the Agency

3.

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 and an analysis of management representations.

11.

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

12.

The Agency carried over 1,36 million euro, i.e. 59 % of its committed appropriations for Title III operational expenditure (2014: 1,57 million euro, i.e. 62 %). These carry-overs were mainly related to the implementation of REMIT (1,1 million euro), a complex operational activity on wholesale energy market integrity and transparency of a multiannual nature. The Agency also carried over 0,79 million euro, i.e. 35 % (2014: 0,98 million euro, i.e. 41 %) of committed appropriations for Title II administrative expenditure, mainly related to studies and services not yet delivered in 2015.

13.

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

1.12.2016   

EN

Official Journal of the European Union

C 449/22

1.

The Office of the Body of European Regulators for Electronic Communications (hereinafter ‘the Office’), which is located in Riga, was established by Regulation (EC) No 1211/2009 of the European Parliament and of the Council (1). The Office’s main task is to provide professional and administrative support services to the Body of European Regulators for Electronic Communications (BEREC) and, under the guidance of the Board of Regulators, to collect and analyse information on electronic communications and to disseminate among National Regulatory Authorities regulatory best practices such as common approaches, methodologies or guidelines on the implementation of the EU regulatory framework.

2.

The Table presents key figures for the Office (2).

Table

Key figures for the Office

3.

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 and an analysis of management representations.

11.

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

12.

In 2013 the Office signed a 4-year framework contract for the provision of professional event organisation services. However, it underestimated its needs and the contract had reached its maximum amount in December 2014. A procurement procedure to sign a new framework contract was launched, but only in August 2015. In the meantime the Office procured these services from the same provider using purchase orders and low-value contracts (negotiated procedures) (9). The total amount of the services so procured exceeded the threshold value (10). An open procurement procedure where all interested economic partners may submit a tender should have been used.

13.

The Office’s audited budgetary implementation report differs from the level of detail provided by most other agencies which demonstrates the need for clear guidelines on the agencies’ budget reporting.

14.

Carry-overs of committed appropriations for Title II (administrative expenditure) were high at 134 228 euro, i.e. 44 % (2014: 91 757 euro, i.e. 40 %). These carry-overs are mainly related to the delivery of services that go beyond 2015.

15.

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

1.12.2016   

EN

Official Journal of the European Union

C 449/27

1.

The Translation Centre for the Bodies of the European Union (hereinafter ‘the Centre’, aka ‘CDT’), which is located in Luxembourg, was created by Council Regulation (EC) No 2965/94 (1). The Centre's task is to provide any European Union institutions and bodies which call upon its services with the translation services necessary for their activities.

2.

The Table presents key figures for the Centre (2).

Table

Key figures for the Centre

3.

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 and an analysis of management representations.

11.

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

12.

The Centre does not yet have a Business Continuity Plan in place. It is thus not complying with Internal Control Standard 10 (9).

13.

At the end of 2015 cash and short term deposits held by the Centre amounted to 38,3 million euro (44 million euro at the end of 2014) and its reserves amounted to 34 million euro (40,4 million euro at the end of 2014). This reflects the reduction of prices in 2015.

14.

The level of committed appropriations carried over was high for Title II (administrative expenditure) at 2 million euro, i.e. 29 % (2014: 1,5 million euro, i.e. 24 %). These carry-overs mainly concern the refurbishment of additional premises rented in 2015 as well as IT services not yet provided by the end of 2015.

15.

The Centre cancelled 5,9 million euro (12 %) of appropriations available at the end of 2015. These cancellations are related to the overestimation of the cost of external translators.

16.

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

1.12.2016   

EN

Official Journal of the European Union

C 449/32

1.

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.

The Table presents key figures for the Centre (2).

Table

Key figures for the Centre

3.

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 and an analysis of management representations.

11.

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

12.

The level of committed appropriations carried over was high for Title II (administrative expenditure) at 477 994 euros, i.e. 28 % (2013: 425 877 euros, i.e. 24 %). This was driven in large part by the high volume of network and other IT equipment required for the refurbishment of the repaired areas of the Centre’s building which had not yet been delivered or invoiced by the end of 2015.

13.

The building provided to the Centre by the Greek State is constructed on an active fault line, which resulted in structural damage to the building. Repair work and structural strengthening has been undertaken by the Greek authorities and was completed in 2015. In addition, the Centre is presently addressing various safety issues related to the construction of the building. A particular safety issue concerns the building’s glass façade and the skylights of the Centre’s conference rooms, and is affecting the availability of the Centre’s facilities.

1.12.2016   

EN

Official Journal of the European Union

C 449/36

1.

The European Police College (hereinafter ‘the College’, aka ‘CEPOL’), which is located in Budapest, was established by Council Decision 2000/820/JHA, repealed and replaced in 2005 by Council Decision 2005/681/JHA (1). 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.

2.

The table presents key figures for the College (2).

Table

Key figures for the College

3.

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 and an analysis of management representations.

11.

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

12.

The College’s audited budgetary implementation report differs from the level of detail provided by most other agencies which demonstrates the need for clear guidelines on the agencies’ budget reporting.

13.

The level of committed appropriations carried over was high for Title II (administrative expenditure) at 212 456 euro, i.e. 49 % (2014: 383 940 euro or 59 %). This resulted from the College’s relocation from the UK to Hungary in September 2014 and the consequential need to initiate new service and supply contracts. Most of the services procured under these annual contracts had not been provided by the end of 2015.

14.

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

1.12.2016   

EN

Official Journal of the European Union

C 449/41

1.

The Consumers, Health, Agriculture and Food Executive Agency (hereinafter ‘the Agency’) was set up on 1 January 2005 (Public Health Executive Agency — PHEA — from 2005 to 2008, Executive Agency for Health and Consumers — EAHC — from 2008 to 2013 and Consumers, Health, Agriculture and Food Executive Agency — CHAFEA — as from 1 January 2014) (1). The Agency, which is located in Luxembourg, was established for a period ending 31 December 2024. It implements the EU Health programme, the Consumer programme and the Better Training for Safer Food initiative.

2.

The Table presents key figures for the Agency (2).

Table

Key figures for the Agency

3.

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.

11.

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

12.

The Agency carried over 0,5 million euro, i.e. 36,4 % (2014: 0,1 million euro, i.e. 13 %) of committed appropriations for Title II (administrative expenditure). These carry-overs are mainly related to the extension of the Agency’s office space and the required fitting out of offices (0,3 million euro).

13.

The Agency carried over 0,9 million euro, i.e. 52 % (2014: 0,9 million euro, i.e. 50 %) of committed appropriations for Title III (expenditure linked to the Agency’s operations). These carry-overs are mainly explained by the Commission’s late issuing of the Agency’s work plan in June 2015.

14.

The Agency cancelled 0,2 million euro, i.e. 18 % of its carry-overs to 2015 (2014: 0,1 million euro, i.e. 14 %), indicating weaknesses in their planning.

15.

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

1.12.2016   

EN

Official Journal of the European Union

C 449/46

1.

The Community Plant Variety Office (hereinafter ‘the Office’, aka ‘CPVO’), which is located in Angers, was created by Council Regulation (EC) No 2100/94 (1). Its main task is to register and examine applications for the grant of Union industrial property rights for plant varieties and to ensure that the necessary technical examinations are carried out by the competent offices in the Member States.

2.

The Table presents key figures for the Office (2).

Table

Key figures for the Office

3.

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.

11.

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

12.

The level of committed appropriations carried over was high for Title II (administrative expenditure) at 395 882 euro, i.e. 28 % (2014: 394 599 euro, i.e. 30 %). They mainly relate to IT projects (134 030 euro), mission costs (96 368 euro) and costs related to internal audit (82 070 euro) for which services will only be delivered or invoices received in 2016.

13.

The rate of cancelled 2014 carry-overs was high for Title II at 20 % (2014: 26 %) and indicates weaknesses in their planning.

14.

The expenditure for procedures associated with appeals was in principle to be covered by appeal fees (8). However, these fees cover only a small part of the actual costs incurred. In 2015, the income derived from appeal fees totalled 11 000 euro (2014: 12 500 euro) whilst the costs of the board of appeal members amounted to some 62 037 euro (2014: 80 114 euro).

15.

As at 31 December 2015, the fees unpaid for more than 90 days (mostly annual fees) amounted to 240 766 euro. The Office did not use all options provided for in its Financial Regulation to recover unpaid fees, such as enforced recovery (9).

16.

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

1.12.2016   

EN

Official Journal of the European Union

C 449/51

1.

The Education, Audiovisual and Culture Executive Agency (hereinafter ‘the Agency’, aka ‘EACEA’), which is located in Brussels, was established by Commission Implementing Decision No 2013/776/EU (1) repealing Decision No 2009/336/EC. 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.

The table presents key figures for the Agency (2).

Table

Key figures for the Agency

3.

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.

11.

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

12.

Carry-overs of committed appropriations were high for Title III (support to agency operations) at 2,8 million euro, i.e. 50 % (2014: 3,2 million euro, i.e. 56 %). They mainly relate to ongoing project audits (1 million euro), IT services (0,8 million euro), information communication and publication services (0,5 million euro) as well as translations (0,2 million euro) which were ordered in 2015 but not yet invoiced at year-end or will only be delivered in 2016.

13.

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

1.12.2016   

EN

Official Journal of the European Union

C 449/56

1.

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) which was repealed by Regulation (EC) No 216/2008 (2). The Agency has been given specific regulatory and executive tasks in the field of aviation safety.

2.

The table presents key figures for the Agency (3).

Table

Key figures for the agency

3.

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 and an analysis of management representations.