ISSN 1977-091X |
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Official Journal of the European Union |
C 449 |
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English edition |
Information and Notices |
Volume 59 |
Notice No |
Contents |
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IV Notices |
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NOTICES FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES |
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Court of Auditors |
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2016/C 449/01 |
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2016/C 449/02 |
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2016/C 449/03 |
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2016/C 449/04 |
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2016/C 449/05 |
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2016/C 449/27 |
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2016/C 449/44 |
EN |
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IV Notices
NOTICES FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES
Court of Auditors
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/1 |
Summary of results from the Court’s annual audits of the European Agencies and other bodies for the financial year 2015
(2016/C 449/01)
CONTENTS
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Paragraph |
Page |
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INTRODUCTION |
1 |
1 |
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INFORMATION IN SUPPORT OF THE COURT’S OPINIONS |
11 |
2 |
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AUDIT RESULTS |
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3 |
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15 |
3 |
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17 |
3 |
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19 |
4 |
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20 |
4 |
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27 |
5 |
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CONCLUSIONS |
29 |
5 |
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6 |
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11 |
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14 |
INTRODUCTION
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. |
INFORMATION IN SUPPORT OF THE COURT’S OPINIONS
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. |
AUDIT RESULTS
Opinions on the reliability of the accounts
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. |
Opinions on the legality and regularity of the transactions underlying the accounts
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. |
Other matter — event after balance sheet date
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). |
Comments made in the SARs
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. |
Follow-up of previous years’ comments
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. |
CONCLUSIONS
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) OJ C 326, 26.10.2012. p. 1.
(2) As of 23 March 2016, the Office is called the European Union Intellectual Property Office (EUIPO).
(3) Article 102 of the Financial Regulation of the SRB.
(4) Staff includes officials, temporary and contract staff as well as seconded national experts.
(5) The SRB is audited by the Court and an audit firm.
(6) Given the limited resources and operations of the Euratom Supply Agency, it is audited solely by the Court.
(7) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
(8) Article 107 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).
(9) The accountants signed the accounts on 24 May 2016 (EBA) and 1 June 2016 (EMA).
ANNEX I
Agencies' budget and staff (1)
|
|
|
Budget (2) |
Staff (3) |
||
Agency |
Parent DG |
Policy Area |
2014 |
2015 |
2014 |
2015 |
|
|
|
(million euro) |
(million euro) |
(million euro) |
(million euro) |
Decentralised Agencies |
|
|
|
|
|
|
European Medicines Agency — EMA |
SANTE |
Health and Consumer Protection |
272,0 |
304,0 |
752 |
775 |
Office for Harmonisation in the Internal Market — OHIM |
GROW |
Internal Market |
419,6 |
384,2 |
928 |
998 |
European Aviation Safety Agency — EASA |
MOVE |
Mobility and Transport |
162,3 |
185,4 |
740 |
779 |
European Agency for the Management of Operational Cooperation at the External Borders — FRONTEX |
HOME |
Home Affairs |
86,7 |
143,3 |
311 |
309 |
European Police Office — EUROPOL |
HOME |
Home Affairs |
84,0 |
95,0 |
574 |
666 |
European Food Safety Authority — EFSA |
SANTE |
Health and Consumer Protection |
79,9 |
78,8 |
442 |
434 |
European Maritime Safety Agency — EMSA |
MOVE |
Mobility and Transport |
57,9 |
64,8 |
245 |
246 |
European Centre for Disease Prevention and Control — ECDC |
SANTE |
Health and Consumer Protection |
60,5 |
58,5 |
277 |
260 |
Translation Centre for the Bodies of the EU — CDT |
DGT |
Language Services |
56,3 |
49,6 |
216 |
218 |
European Environment Agency — EEA |
ENV |
Environment |
52,6 |
49,2 |
204 |
198 |
The European Union s Judicial Cooperation Unit — EUROJUST |
JUST |
Justice |
34,0 |
34,0 |
252 |
246 |
European Chemicals Agency — ECHA |
GROW |
Enterprise |
113,2 |
115,1 |
587 |
572 |
European Railway Safety Agency — ERA |
MOVE |
Mobility and Transport |
25,7 |
26,3 |
159 |
157 |
European Union Agency for Fundamental Rights — FRA |
JUST |
Justice |
21,5 |
21,6 |
110 |
107 |
European Banking Authority — EBA |
FISMA |
Financial Services and Capital Markets |
33,6 |
33,4 |
146 |
156 |
European foundation for improvement of living & working conditions — EUROFOUND |
EMPL |
Employment and Social Affairs |
21,5 |
21,2 |
111 |
111 |
European Training Foundation — ETF |
EAC |
Education and Culture |
22,5 |
21,0 |
133 |
129 |
European Securities and Markets Authority — ESMA |
FISMA |
Financial Services and Capital Markets |
33,3 |
36,7 |
168 |
186 |
European Centre for the Development of Vocational Training — CEDEFOP |
EAC |
Education and Culture |
18,4 |
18,4 |
120 |
123 |
European Insurance and Occupational Pensions Authority — EIOPA |
FISMA |
Financial Services and Capital Markets |
21,6 |
20,2 |
129 |
133 |
European Monitoring Centre for Drugs and Drug Addiction — EMCDDA |
HOME |
Home Affairs |
15,7 |
18,5 |
101 |
100 |
European Agency for Safety and Health at Work — EU-OSHA |
EMPL |
Employment and Social Affairs |
17,3 |
16,9 |
65 |
65 |
Community Plant Variety Office — CPVO |
SANTE |
Agriculture and Rural Development |
14,7 |
14,7 |
45 |
46 |
European GNSS Agency — GSA |
GROW |
Enterprise |
403,7 |
363,8 |
131 |
139 |
European Fisheries Control Agency — EFCA |
MARE |
Maritime Affairs & Fisheries |
9,2 |
9,2 |
58 |
64 |
European Institute for Gender equality — EIGE |
JUST |
Justice |
7,4 |
7,9 |
41 |
42 |
European Police College — CEPOL |
HOME |
Home Affairs |
8,9 |
8,8 |
43 |
45 |
European Network and Information Security Agency — ENISA |
CNECT |
Digital Single Market |
10,0 |
10,0 |
62 |
69 |
European Agency for the Cooperation of Energy Regulators — ACER |
ENER |
Energy |
10,9 |
11,3 |
72 |
80 |
European Asylum Support Office — EASO |
HOME |
Home Affairs |
15,6 |
15,9 |
79 |
93 |
Office of the body of European Regulators for Electronic Communications — BEREC |
CNECT |
Digital Single Market |
4,2 |
4,0 |
27 |
26 |
European Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice — EU-LISA |
HOME |
Home Affairs |
64,9 |
71,7 |
129 |
134 |
Single Resolution Board — SRB (4) |
FISMA |
Financial Services and Capital Markets |
n/a |
22,0 |
n/a |
108 |
Executive Agencies |
|
|
|
|
|
|
Education, Audiovisual and Culture Executive Agency — EACEA |
EAC & CNECT & HOME & ECHO |
Education and Culture |
46,9 |
46,9 |
437 |
441 |
Research Executive Agency — REA |
RTD & EAC & GROW & HOME & CNECT & AGRI |
Research and Innovation |
51,6 |
54,6 |
548 |
618 |
European Research Council Executive Agency — ERCEA |
RTD |
Research and Innovation |
36,3 |
39,6 |
388 |
417 |
Executive Agency for Small and Medium-sized Enterprises — EASME |
ENTR & RTD & & ENR & ENV & CLIMA & CNECT & MARE |
Energy, Entrepreneurship and Innovation |
24,5 |
36,4 |
283 |
373 |
Innovation and Networks Executive Agency — INEA |
MOVE & ENER & CNECT & RTD |
Mobility and Transport |
13,4 |
18,4 |
151 |
186 |
Consumers, Health, Agriculture and Food Executive Agency — CHAFEA |
SANTE & JUST & AGRI |
Consumer Protection |
7,2 |
7,4 |
49 |
49 |
Other Bodies |
|
|
|
|
|
|
European Institute of Innovation and Technology — EIT |
EAC |
Innovation and Technology |
174,9 |
231,7 |
48 |
50 |
Euratom Supply Agency — EURATOM (4) |
ENER & RTD |
Energy and Innovation |
0,1 |
0,1 |
18 |
17 |
Europol Pension Fund — EPF |
HOME |
Administrative Expenditure of Europol |
n/a |
n/a |
n/a |
n/a |
Total |
|
|
2 614,5 |
2 770,5 |
9 379 |
9 965 |
(1) Source: Data provided by the agencies
(2) Budget figures are based on payment appropriations
(3) Staff includes officials, temporary and contract staff and seconded national experts
(4) SRB and EURATOM are not consolidated in the EU accounts
ANNEX II
Comments made by the Court, not calling its opinion into question
|
Total No of comments |
Reliability of accounts |
Legality/Regularity of transactions |
Internal controls |
Budgetary management |
Other comments |
|||||||||
Procurement procedures |
Other |
Internal control standards |
Other |
High carry-overs |
High cancellations of 2014 carry-overs |
Budget implementation |
Budget funding |
Other |
SFM |
Staff matters |
Other |
||||
1 |
ACER — Ljubljana |
2 |
|
|
|
|
|
XX |
|
|
|
|
|
|
|
2 |
BEREC — Riga |
3 |
|
X |
|
|
|
X |
|
|
|
X |
|
|
|
3 |
CdT — Luxembourg |
4 |
|
|
|
X |
|
X |
X |
|
|
X |
|
|
|
4 |
CEDEFOP — Thessaloniki |
2 |
|
|
|
|
|
X |
|
|
|
|
|
|
X |
5 |
CEPOL — Budapest |
2 |
|
|
|
|
|
X |
|
|
|
X |
|
|
|
6 |
CHAFEA — Luxembourg |
3 |
|
|
|
|
|
XX |
X |
|
|
|
|
|
|
7 |
CPVO — Angers |
4 |
|
|
|
|
|
X |
X |
|
|
|
X |
|
X |
8 |
EACEA — Brussels |
1 |
|
|
|
|
|
X |
|
|
|
|
|
|
|
9 |
EASA — Cologne |
2 |
|
|
|
|
|
XX |
|
|
|
|
|
|
|
10 |
EASME — Brussels |
2 |
|
|
|
|
|
X |
|
|
|
X |
|
|
|
11 |
EASO — Valletta |
2 |
|
|
|
|
|
X |
|
|
|
|
|
X |
|
12 |
EBA — London |
2 |
|
|
|
|
|
X |
|
|
|
X |
|
|
|
13 |
ECDC — Stockholm |
4 |
|
X |
|
|
|
XX |
|
X |
|
|
|
|
|
14 |
ECHA — Helsinki |
2 |
|
|
X |
|
|
X |
|
|
|
|
|
|
|
15 |
EEA — Copenhagen |
1 |
|
|
|
|
|
|
|
|
|
|
X |
|
|
16 |
EFCA — Vigo |
1 |
|
|
|
X |
|
|
|
|
|
|
|
|
|
17 |
EFSA — Parma |
1 |
|
|
|
|
X |
|
|
|
|
|
|
|
|
18 |
EIGE — Vilnius |
1 |
|
|
|
|
|
X |
|
|
|
|
|
|
|
19 |
EIOPA — Frankfurt |
1 |
|
|
|
|
|
X |
|
|
|
|
|
|
|
20 |
EIT — Budapest |
10 |
|
|
X |
|
X |
X |
|
|
XX |
|
XX |
|
XXX |
21 |
EMA — London |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
22 |
EMCDDA — Lisbon |
1 |
|
|
|
|
X |
|
|
|
|
|
|
|
|
23 |
EMSA — Lisbon |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
24 |
ENISA — Heraklion |
2 |
|
|
|
|
|
X |
|
|
|
|
|
X |
|
25 |
EPF — The Hague |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
X |
26 |
ERA — Valenciennes |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
27 |
ERCEA — Brussels |
1 |
|
|
|
|
|
X |
|
|
|
|
|
|
|
28 |
ESMA — Paris |
2 |
|
|
|
|
|
XX |
|
|
|
|
|
|
|
29 |
ETF — Turin |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
30 |
EU-LISA — Tallinn |
5 |
|
XX |
|
|
|
X |
|
|
X |
|
X |
|
|
31 |
EU-OSHA — Bilbao |
2 |
|
|
|
|
|
XX |
|
|
|
|
|
|
|
32 |
EURATOM — Luxembourg |
1 |
|
|
|
|
|
X |
|
|
|
|
|
|
|
33 |
EUROFOUND — Dublin |
1 |
|
|
|
|
|
X |
|
|
|
|
|
|
|
34 |
EUROJUST — The Hague |
1 |
|
|
|
|
|
X |
|
|
|
|
|
|
|
35 |
EUROPOL — The Hague |
1 |
|
|
|
|
|
X |
|
|
|
|
|
|
|
36 |
FRA — Vienna |
1 |
|
|
|
|
|
X |
|
|
|
|
|
|
|
37 |
FRONTEX — Warsaw |
5 |
|
|
XX |
|
|
XX |
|
|
|
|
X |
|
|
38 |
GSA — Prague |
6 |
X |
|
|
X |
|
X |
|
|
|
X |
|
X |
X |
39 |
INEA — Brussels |
1 |
|
|
|
|
|
X |
|
|
|
|
|
|
|
40 |
OHIM — Alicante |
4 |
|
|
|
|
|
X |
|
|
|
|
XX |
X |
|
41 |
REA — Brussels |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
42 |
SRB — Brussels |
5 |
|
|
|
X |
|
XX |
|
X |
|
|
X |
|
|
Subtotals: |
90 |
1 |
4 |
4 |
4 |
3 |
40 |
3 |
2 |
3 |
6 |
9 |
4 |
7 |
|
Totals: |
1 |
8 |
7 |
54 |
20 |
ANNEX III
Follow-up of open comments not calling the Court’s opinions into question
|
|
Total |
Completed |
Ongoing |
Outstanding |
N/A |
|
Decentralised Agencies |
|||||
1 |
European Medicines Agency — EMA |
4 |
|
3 |
|
1 |
2 |
Office for Harmonisation in the Internal Market — OHIM |
6 |
3 |
2 |
|
1 |
3 |
European Aviation Safety Agency — EASA |
4 |
1 |
1 |
|
2 |
4 |
European Agency for the Management of Operational Cooperation at the External Borders — FRONTEX |
8 |
1 |
5 |
1 |
1 |
5 |
European Police Office — EUROPOL |
4 |
1 |
1 |
|
2 |
6 |
European Food Safety Authority — EFSA |
3 |
2 |
1 |
|
|
7 |
European Maritime Safety Agency — EMSA |
1 |
1 |
|
|
|
8 |
European Centre for Disease Prevention and Control — ECDC |
2 |
1 |
|
|
1 |
9 |
Translations Centre for the Bodies of the EU — CDT |
2 |
1 |
|
1 |
|
10 |
European Environment Agency — EEA |
8 |
3 |
2 |
1 |
2 |
11 |
European Body for the Enhancement of Judicial Cooperation — EUROJUST |
3 |
|
2 |
|
1 |
12 |
European Chemicals Agency — ECHA |
2 |
|
1 |
|
1 |
13 |
European Railway Agency — ERA |
4 |
|
2 |
|
2 |
14 |
European Union Agency for Fundamental Rights — FRA |
3 |
1 |
|
|
2 |
15 |
European Banking Authority — EBA |
2 |
|
1 |
|
1 |
16 |
European foundation for improvement of living & working conditions — EUROFOUND |
3 |
2 |
|
|
1 |
17 |
European Training Foundation — ETF |
4 |
1 |
1 |
|
2 |
18 |
European Securities and Markets Authority — ESMA |
9 |
3 |
4 |
|
2 |
19 |
European Centre for the Development of Vocational Training — CEDEFOP |
0 |
|
|
|
|
20 |
European Insurance and Occupational Pensions Authority — EIOPA |
2 |
|
2 |
|
|
21 |
European Monitoring Centre for Drugs and Drug Addiction — EMCDDA |
1 |
|
|
|
1 |
22 |
European Agency for Safety and Health at Work — EU-OSHA |
2 |
1 |
|
|
1 |
23 |
Community Plant Variety Office – CPVO |
2 |
|
1 |
1 |
|
24 |
European GNSS Agency — GSA |
3 |
|
1 |
|
2 |
25 |
European Fisheries Control Agency — EFCA |
0 |
|
|
|
|
26 |
European Institute for Gender equality — EIGE |
1 |
|
|
|
1 |
27 |
European Police College — CEPOL |
5 |
1 |
|
|
4 |
28 |
European Network and Information Security Agency — ENISA |
2 |
1 |
|
|
1 |
29 |
European Agency for the Cooperation of Energy Regulators — ACER |
3 |
|
|
1 |
2 |
30 |
European Asylum Support Office — EASO |
10 |
|
5 |
2 |
3 |
31 |
Office for the body of European Regulators for Electronic Communications — BEREC |
5 |
3 |
|
1 |
1 |
32 |
European Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice — EU-LISA |
5 |
1 |
2 |
|
2 |
|
Executive Agencies |
|||||
33 |
Education, Audiovisual and Culture Executive Agency — EACEA |
1 |
|
|
|
1 |
34 |
Research Executive Agency — REA |
0 |
|
|
|
|
35 |
European Research Council Executive Agency — ERCEA |
1 |
1 |
|
|
|
36 |
Executive Agency for Small and Medium-sized Enterprises — EASME (previously EACI) |
4 |
2 |
2 |
|
|
37 |
Innovation and Networks Executive Agency — INEA (previously TEN-TEA) |
1 |
|
|
|
1 |
38 |
Consumers, Health, Agriculture and Food Executive Agency — CHAFEA (previously EAHC) |
1 |
|
|
|
1 |
|
Other Bodies |
|||||
39 |
European Institute of Innovation and Technology — EIT |
12 |
5 |
5 |
1 |
1 |
40 |
Euratom Supply Agency — EURATOM |
0 |
|
|
|
|
41 |
Europol Pension Fund — EPF |
1 |
1 |
|
|
|
Totals |
134 |
37 |
44 |
9 |
44 |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/17 |
REPORT
on the annual accounts of the Agency for the Cooperation of Energy Regulators for the financial year 2015, together with the Agency’s reply
(2016/C 449/02)
INTRODUCTION
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
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
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. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
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) More information on the Agency’s competences and activities is available on its website: www.acer.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(4) These include the balance sheet and the statement of financial performance, 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.
(9) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous year’s comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
The Agency carried over 1,57 million euro, i.e. 62 %, of committed appropriations for title III operational expenditure (2013: 3,1 million euro, i.e. 91 %). These carry-overs were mainly related to the implementation of REMIT, a complex multi-annual operational activity for which the Implementing Regulation was only adopted on 17 December 2014 (1). The Agency also carried over 0,98 million euro, i.e. 41 % (2013: 1,9 million euro, i.e. 56 %), of committed appropriations for title II administrative expenditure, mainly related to studies for the implementation of REMIT and annual contracts renewed towards the year end. |
N/A |
2014 |
In October 2013, through a budget amendment, the Agency received an additional 3 million euro in appropriations to implement REMIT, which it carried over to 2014. However, according to the Implementing Regulation the REMIT framework will only become operational in October 2015. Part of the funds was spent in 2014 on preparation for the implementation of REMIT. At the end of 2014, the Agency made two pre-financing payments amounting to 1,56 million euro for contracts on REMIT-related services to be provided in the period 2015 to 2017, thereby avoiding an automatic return to the Commission of the unused funds (2). Although this will allow the Agency to finance its future REMIT-related activities, this is in contradiction with the budgetary principle of annuality. |
N/A |
2014 |
According to the Seat Agreement between the Agency and the Slovenian government, a European School will be established in Slovenia. However, more than four years after the agreement no European School has been set up. |
Outstanding |
(1) Commission Implementing Regulation (EU) No 1348/2014 (OJ L 363, 18.12.2014, p. 121).
(2) Article 13 of the EU Financial Regulation stipulates that amounts can be carried over for one financial year only.
THE AGENCY’S REPLY
13. |
The Agency acknowledges the identified level of appropriations carried over, due to open commitments at year-end, mainly streaming from the long-term nature of the REMIT project implementation. Given the persistent uncertainty on the annual budgetary allocation to the Agency, it is difficult to reconcile the principle of annuality with the inevitable multiannual nature of the REMIT project. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/22 |
REPORT
on the annual accounts of the Office of the Body of European Regulators for Electronic Communications for the financial year 2015, together with the Office’s reply
(2016/C 449/03)
INTRODUCTION
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
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON THE LEGALITY AND REGULARITY OF TRANSACTIONS
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. |
COMMENTS ON BUDGETARY MANAGEMENT
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. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 337, 18.12.2009, p. 1.
(2) More information on the Office’s competences and activities is available in its website: www.berec.europa.eu.
(1) Budget figures are based on payment appropriations.
(2) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Office.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
(9) In the case of purchase orders and low-value contracts the procurement rules limit the competition to one and three candidates, respectively.
(10) The total value of the contracts signed amounts to around 80 000 euro, whereas the threshold established by Article 137 of Delegated Regulation (EU) No 1268/2012 is 60 000 euro.
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2011 |
The Office had not yet adopted and implemented all the internal control standards. |
Completed |
2013 |
Of the 1 183 reimbursements for experts made in 2013, 1 078 were late. Where payments were late, they were overdue by an average delay of 78 days in the first half of 2013 as compared with 33 days in the second half of 2013. |
Completed |
2014 |
The overall level of committed appropriations improved to 98 % (2013: 87 %). However, the level of committed appropriations carried over increased to 0,9 million euro, i.e. 23 % (2013: 0,5 million euro, 13 %), particularly in relation to operational activities (title III) such as on-going studies on electronic communications. |
N/A |
2014 |
The large number of budget transfers changed the structure of the initial budget considerably: title I (staff costs) was reduced by 17 %, title II (administrative expenditure) was reduced by 44 % and title III (operational expenditure) was increased by 60 %, mainly in order to finance on-going studies. |
Completed |
2014 |
The 2014 budget provision for contributions from EFTA’s (1) national regulatory authorities having observer status at BEREC did not materialise in the absence of agreements with EFTA countries. |
Outstanding |
(1) European Free Trade Association.
THE BEREC OFFICE REPLY
12. |
The BEREC Office would like to thank the Court for the detailed review of the Agency’s procurement planning procedure and the recommendations made for improvement. The BEREC Office will revise its existing procurement rules and will reconsider its current decentralised procurement model with a view to streamlining the process. |
13. |
The BEREC Office takes note of the comment that the 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. The BEREC Office — who, in line with the suggestions in the Framework Financial Regulation, has outsourced the role of Accounting Officer to the Accounting Officer of the European Commission — is of the understanding that the different level of details is based on the practices of the Commission’s reporting and to avoid having largely similar information in two different reports. The BEREC Office will follow any guidelines for the agencies’ budget reporting for the next financial year provided that such guidelines are issued. |
14. |
The BEREC Office takes note of the budgetary management comment on committed appropriations in relation to administrative expenditure for Title II. These carry-overs are mainly related to the delivery of services that go beyond 2015 and are coming from normal operations of the BEREC Office, which were planned in advance. The BEREC Office has set a target to reduce the level of committed appropriations carried over in 2016 for administrative expenditure. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/27 |
REPORT
on the annual accounts of the Translation Centre for the Bodies of the European Union for the financial year 2015, together with the Centre’s reply
(2016/C 449/04)
INTRODUCTION
1. |
The Translation Centre for the Bodies of the European Union (hereinafter ‘the Centre’, aka ‘CDT’), which is located in Luxembourg, was created by Council Regulation (EC) No 2965/94 (1). The Centre's task is to provide any European Union institutions and bodies which call upon its services with the translation services necessary for their activities. |
2. |
The Table presents key figures for the Centre (2). Table Key figures for the Centre
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON INTERNAL CONTROLS
12. |
The Centre does not yet have a Business Continuity Plan in place. It is thus not complying with Internal Control Standard 10 (9). |
COMMENTS ON BUDGETARY MANAGEMENT
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. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 314, 7.12.1994, p. 1.
(2) More information on the Centre's competences and activities is available on its website: www.cdt.europa.eu.
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Centre.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
(9) The Centre’s Internal Control Standards are based on the equivalent standards laid down by the Commission.
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
Since 2012 (merged) |
Since 2012, the Centre’s cash and short term deposits and its budgetary surplus and reserves have been excessive. This indicates scope to reduce prices. |
Completed |
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. |
Outstanding |
THE CENTRE’S REPLY
12. |
Following the completion of the Business Impact Analysis, the Business Continuity Strategy and the operational Business Continuity Plans were approved in Q2 of 2016 by the Centre’s management along with the review of the Business Continuity documents. |
13. |
The Centre has taken various steps to reduce its budgetary surpluses. Firstly, the Centre reduced the 2015 price of the translation of documents by 6,8 %, and the fixed part of the price for the translation of trademarks by 1 million euro. Secondly, in order to avoid excessive budget surpluses in the future, the Centre has introduced an automatic reimbursement of the budget outturn of the previous year to clients, if this amount exceeds 1 million euro. Based on this new mechanism, the budget surplus of 2014, amounting to 2,6 million euro, was paid back to clients in 2015. Thirdly, the draft programming document 2017-2019 has been prepared with deficits in mind and subsequently a further reduction of the reserve for stability pricing is envisaged as follows: -3,9 million euro in 2017, -3,0 million euro in 2018 and -3,2 million euro in 2019 respectively. |
14. |
The Centre has taken due note of the Court’s observation and will continue to implement measures to improve its budgetary planning and monitoring systems. The carry-overs are mainly due to the multiannual nature of IT projects and the refurbishment of additional premises. |
15. |
The Centre has implemented a closer monitoring of the evolution of the external translation costs. Therefore, the budget forecasts for 2016 and onwards are based on the up to date figures, and the costs are monitored closely during the year, as an input for both amending budgets and budgets in future years. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/32 |
REPORT
on the annual accounts of the European Centre for the Development of Vocational Training for the financial year 2015, together with the Centre’s reply
(2016/C 449/05)
INTRODUCTION
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
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
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. |
OTHER COMMENTS
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. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(2) More information on the Centre’s competences and activities is available on its website: www.cedefop.europa.eu
(1) Budget figures are based on payment appropriations.
(2) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Centre
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
THE CENTRE’S REPLY
12. |
Cedefop continues to use its funds effectively and efficiently with an overall budget implementation rate of 98,5 %. Of the EUR 425 877 brought forward to 2015, only EUR 17 068 was eventually cancelled (or 4 %). In 2015, Cedefop was able to utilise additional savings resulting from the downward adjustment in the salary weighting factor from 83,8 % to 79,9 %. This adjustment was only communicated to the Centre in November 2015. Consequently, although Cedefop was able to utilise these funds immediately before the year-end, disbursement could only take place in 2016. |
13. |
Repair works and structural strengthening were completed in 2015 (1) and were effective as demonstrated by recent crack meter readings (April 2016), which indicate a minor rate of sliding and, as a result, an increased stability. In addition, Cedefop has installed all necessary systems (inclinometers) to monitor stability and rate of sliding. Finally, sliding insurance for the building is in place since 2014. In short, the structural damage has been comprehensively addressed and is now negligible. As noted by the Court, Cedefop is currently addressing various safety issues related to the building’s glass façade and the skylights of the Centre’s conference rooms, which exhibit specific accelerated wear-and-tear. This is linked to the mode of construction of the glass façade and the skylights, and not to the location of the building on an active fault line. The works contract to address this issue was signed on 1 June and it is anticipated that facilities will be fully available by end of August 2016. With the completion of these works, the aforementioned safety issues will have been addressed fully. |
(1) Total cost: approx. EUR 1 700 000, covered in full by the Greek government.
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/36 |
REPORT
on the annual accounts of the European Police College for the financial year 2015, together with the College’s reply
(2016/C 449/06)
INTRODUCTION
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
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
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. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 256, 1.10.2005, p. 63.
(2) More information on the College’s competences and activities is available on its website: www.cepol.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the College.
(3) These include the balance sheet and the statement of financial performance, 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 DelegatedRegulation (EU) No 1271/2013.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2012 |
Out of the committed appropriations carried over from 2011 amounting to 1,7 million euro, 0,7 million euro (41,2 %) were cancelled in 2012. This was mainly due to lower-than-estimated costs to be reimbursed under 2011 grant agreements (0,44 million euro or 62 % of cancelled carry-overs). |
N/A |
2013 |
Out of the committed appropriations carried over from 2012 amounting to 1,7 million euro, 0,3 million euro (17,6 %) were cancelled in 2013. This was mainly due to lower-than-estimated costs to be reimbursed under 2012 grant agreements (0,21 million euro 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. |
N/A |
2013 |
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. |
Completed |
2014 |
The cancellation rate for committed appropriations carried over from 2013 was high at 129 828 euro (15 %), mainly because of the cancellation of the Matrix project (15 090 euro) and the lower than estimated costs to be reimbursed under the 2013 grant agreements (57 285 euro). The Matrix project was cancelled during its initial phase because it did not meet operational needs. This could have been avoided if there had been a proper user analysis by the College. The over-estimation of grant costs indicates the need to obtain more accurate information from the College’s beneficiaries. |
N/A |
2014 |
The level of committed appropriations carried over was high for Title II (administrative expenditure) at 383 940 euro, i.e. 59 % (2013: 145 414 euro, i.e. 30 %). This was driven in large part by the high volume of furniture and IT equipment, and the maintenance required, for the College’s new premises, ordered but not yet delivered and/or paid for in the last quarter of 2014 (the college completed its move to Budapest in October 2014). |
N/A |
THE COLLEGE’S REPLY
12. |
The College has taken note of the Court's comments. CEPOL — which, in line with the suggestions in the Framework Financial Regulation, has outsourced the role of Accounting Officer to the Accounting Officer of the European Commission — is of the understanding that the different level of detail is based on the practices of the Commission’s reporting and to avoid having largely similar information in two different reports. CEPOL supports the Commission’s intention of establishing guidelines for the agencies’ budget reporting for the 2016 accounts. |
13. |
The College has taken note of the Court’s comments. The carry-over rate for Title II (administrative expenditure) is high but justified having in view the contract renewals or pending invoices at the end of year. CEPOL improved its budget management and commits to further maintain compliance with the budgetary principle of annuality provided in the Financial Regulation. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/41 |
REPORT
on the annual accounts of the Consumers, Health, Agriculture and Food Executive Agency for the financial year 2015, together with the Agency’s reply
(2016/C 449/07)
INTRODUCTION
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
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
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. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) Commission Decision 2013/770/EU (OJ L 341, 18.12.2013, p. 69).
(2) More information on the Agency’s competences and activities is available on its website: http://ec.europa.eu/chafea/
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(3) These include the balance sheet and the statement of financial performance, 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, the budget implementation reports and notes on budget implementation.
(5) Articles 38 to 42 of the Financial Regulation of the Agency.
(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) Articles 87 to 92 of the Financial Regulation of the Agency.
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
Carry-overs for title III (Expenditure linked to the Agency’s operations) are high at 0,9 million euro (2013: 1,0 million euro), i.e. 50 % (2013: 43 %) of committed appropriations. Although such a high level of carry-over is at odds with the budgetary principle of annuality, it is related to services received in 2014 (0,6 million euro) and annual contracts covering part of 2015 (0,3 million euro). |
N/A |
THE AGENCY’S REPLY
12. |
The Agency has no additional observations to the Court’s comments. |
13. |
The Agency has no additional observations to the Court’s comments. |
14. |
The Agency accepts the Court’s comments. The Agency shall continue its efforts to further reduce the level of carry-over and C8 cancellation rate. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/46 |
REPORT
on the annual accounts of the Community Plant Variety Office for the financial year 2015, together with the Office’s reply
(2016/C 449/08)
INTRODUCTION
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
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
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. |
OTHER COMMENTS
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). |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(2) More information on the Office's competences and activities is available on its website: www.cpvo.europa.eu.
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Office.
(3) These include the balance sheet and the statement of financial performance, 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 38 to 42 of the Financial Regulation of the Office.
(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) Articles 87 to 92 of the Financial Regulation of the Office.
(8) Recitals of Commission Regulation No 1238/95 (OJ L 121, 1.6.1995, p. 31).
(9) Article 53 of the Financial Regulation of the Office.
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
The Office uses electronic banking for most of its payments. The Accounting Officer or her two deputies can sign the payments electronically. No signature of a second person is required, which represents a financial risk for the Office. |
Outstanding |
2014 |
Although the Office became operational in 1995, there is still no seat agreement signed with its host Member State that would clarify the conditions under which the Office can operate and that it can offer to its staff. |
Ongoing |
THE OFFICE’S REPLY
12. |
The Office takes note of the Court’s comments regarding the level of carry-overs on Title II and considers that the carry overs were justified. |
13. |
The Office takes note of the Court’s comments regarding the cancellation of 2014 carry-overs. |
14. |
The appeal fee, has been fixed in Commission Regulation (EC) No 1238/95 in the amount of 1 500 euro and is enforced as such by the OffIce. |
15. |
The Office takes note of the comments regarding unpaid fees, and, notwithstanding that the CPVO Basic Regulation has specific penalties which are applied in the case of non-payment, will investigate the possibility of cost effective recovery of amounts owed. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/51 |
REPORT
on the annual accounts of the Education, Audiovisual and Culture Executive Agency for the financial year 2015, together with the Agency’s reply
(2016/C 449/09)
INTRODUCTION
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
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
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. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 343, 19.12.2013, p. 46.
(2) More information on the Agency’s competences and activities is available on its website: www.eacea.ec.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(3) These include the balance sheet and the statement of financial performance, 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 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).
(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 162 of Regulation (EU, Euratom) No 966/2012.
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
The overall level of committed appropriations was high at 98 % (97 % in 2013). Carry-overs of committed appropriations were also high for Title III (support to agency operations) at 56 %, i.e. 3,2 million euro (1). They mainly relate to IT services ordered in 2014 but not yet invoiced at year-end (1,2 million euro), ongoing project audits (1 million euro) and to communication, publication and translation services (0,9 million euro) related to new programmes managed by the Agency. |
N/A |
(1) Following a restructuring of the Agency’s budget, Title III ‘Support to the agency operations’ was introduced in 2014.
THE AGENCY’S REPLY
The Agency takes note of the Court’s comments. The Agency will continue the efforts put in place to control the rate of carry-over.
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/56 |
REPORT
on the annual accounts of the European Aviation Safety Agency for the financial year 2015, together with the Agency’s reply
(2016/C 449/10)
INTRODUCTION
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
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
Carry-overs of committed appropriations were high for Title II (administrative expenditure) at 4,4 million euro, i.e. 20,2 % (2014: 3,6 million euro, i.e. 22 %) and for Title III (operational expenditure) at 2 million euro, i.e. 32,0 % (2014: 2 million euro, i.e. 38,1 %). These carry-overs mainly relate to IT developments that were ordered near the end of the year, as well as rule-making activities and research projects which go beyond 2015. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(3) More information on the Agency’s competences and activities is available on its website: www.easa.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(4) These include the balance sheet and the statement of financial performance, 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 Delegated Regulation (EU) No 1271/2013.
(9) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2013 |
In 2012, EASA selected 14 national aviation authorities (NAAs) and 10 ‘Qualified Entities’ (QEs) through procurement procedures to outsource part of its certification activities. 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. 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. |
Completed |
2013 |
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. |
Ongoing |
2014 |
The overall level of appropriations committed was high at 97,1 %. Although the Agency reduced further the overall level of carry-overs of committed appropriations from 7,2 million euro (7,7 %) in 2013 to 5,9 million euro (6,2 %) in 2014, carry-overs of committed appropriations were high at 3,6 million euro (22,0 %) for Title II (administrative expenditure) and at 2,0 million euro (38,1 %) for Title III (operational expenditure). 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 |
2014 |
There is room to improve the Agency’s procurement planning, particularly in respect of framework contracts. In 2014, three procedures were launched too late to replace existing framework contracts by the time they expired. To ensure business continuity, two existing framework contracts were extended until the new ones were in place and in another case a negotiated procurement procedure was launched to bridge the gap. The change of the initial contract duration affects fair competition and the use of a negotiated procedure was not in compliance with the Financial Regulation. |
N/A |
THE AGENCY’S REPLY
13. |
Since 2012, the Agency has significantly reduced carry-over levels from 24 % to 20,2 % for Title II and from 46,3 % to 32 % for Title III. Amounts carried over are, as acknowledged by the auditors, justified by the nature of the Agency’s activities and now very close indeed to acceptable levels (+0,2 % and + 2 % respectively). Nevertheless, the Agency remains committed to reducing carry-over levels still further. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/61 |
REPORT
on the annual accounts of the Executive Agency for Small and Medium-sized Enterprises for the financial year 2015, together with the Agency’s reply
(2016/C 449/11)
INTRODUCTION
1. |
The Executive Agency for Small and Medium-sized Enterprises (hereinafter ‘the Agency’, aka ‘EASME’), which is located in Brussels, replaced and succeeded the Executive Agency for Competitiveness and Innovation (EACI) and was established for the period 1 January 2014 to 31 December 2024 by Commission Implementing Decision 2013/771/EU (1), repealing Commission Decision 2007/372/EC (2). Its considerably extended mandate is to manage, in close cooperation with seven Directorates General of the Commission, EU actions in the fields of research and innovation, competitiveness of SMEs, environment and climate action, maritime and fisheries and, as in the past, parts of the Competitiveness and Innovation Programme 2007-2013. |
2. |
The Table presents key figures for the Agency (3). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
Committed appropriations carried over for Title III (Programme Support Expenditure) amount to 4 million euro, i.e. 65 % (2013: 2,6 million euro, i.e. 72 %). The carry overs mainly relate to specific contracts for experts (3 million euro) and external audits (0,6 million euro), of which 0,8 million euro were signed late in 2015. These carry-overs are mainly for services to be provided in 2016. |
13. |
In December 2015 the Agency paid 2,2 million euro for the 2016 rent of its premises and associated expenses. These payments were made from the Agency’s 2015 budget and therefore are in breach of the budgetary principle of annuality (9). |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 341, 18.12.2013, p. 73.
(2) OJ L 140, 1.6.2007, p. 52.
(3) More information on the Agency’s competences and activities is available on its website: www.ec.europa.eu/easme/
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(4) These include the balance sheet and the statement of financial performance, 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 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).
(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 162 of Regulation (EU, Euratom) No 966/2012.
(9) Article 7 of Commission Regulation (EC) No 1653/2004 (OJ L 297, 22.9.2004, p 6).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2013 |
Although budget implementation rates for 2013 were satisfactory, the extent to which appropriations carried over from 2012 were cancelled in 2013 (215 000 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. |
Completed |
2014 |
The extent to which budget appropriations carried over from 2013 were cancelled in 2014 (260 209 euro, i.e. 20 % of carry-overs (19 % in 2013)) demonstrates an overestimation of budgetary needs at the end of 2013, as was the case in the previous year. |
Completed |
2014 |
Although the Agency’s initial budget was amended and reduced in September 2014 by 3 million euro, only 91 % of the reduced budget appropriations were committed by the Agency. This low implementation rate is mainly explained by organisational and operational challenges linked to the extended mandate of the Agency for the implementation of additional programmes and tasks in close cooperation with the Commission. Nonetheless, the significant under-consumption of the budget shows the need to improve the Agency’s budget planning. |
Ongoing (1) |
2014 |
This is also reflected in the high and increased level of committed appropriations carried over to 2015, amounting to 3,8 million euro, i.e. 17 % (2013: 1,3 million euro, i.e. 8 %), mainly related to title III (Programme Support Expenditure) with 2,6 million euro, i.e. 72 % (2013: 0,6 million euro, i.e. 35 %) which is at odds with the budgetary principle of annuality. |
Ongoing |
(1) In 2015, excluding the payments referred to in paragraph 14, budget implementation was low at 93 %.
THE AGENCY’S REPLY
12. |
During 2015 the Agency took the necessary measures to reduce the carry- over to 2016. The carry-over of the committed appropriations for audit contracts does not give rise to corrective actions, as they are justified based on their nature. |
13. |
The Agency made the initial budgetary planning based on the possible move to new premises. OIB unexpectedly cancelled this move thus a large budget was at the Agency’s disposal. Moreover, the Agency improved its methodology of calculation of salaries and revised the average salary rates for all grades which had an impact on the overall budget. Several actions were undertaken to reduce the surplus, however, after consulting the members of the EASME Steering Committee and according to the principles of economy and efficiency, the Agency decided to use the surplus exceptionally for the rent and services of the current building for the next financial year. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/66 |
REPORT
on the annual accounts of the European Asylum Support Office for the financial year 2015, together with the Office’s reply
(2016/C 449/12)
INTRODUCTION
1. |
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. |
2. |
The Table presents key figures for the Office (2). Table Key figures for the Office
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
The Office committed only 14,5 million euro, i.e. 93,7 % of the approved budget (2014: 12,4 million euro, i.e. 84,7 %). The level of committed appropriations carried over for Title II (administrative expenditure) was high at 1 076 583 euro, i.e. 36,9 % (2014: 635 492 euro, i.e. 28,7 %). The carry-overs mainly relate to consulting services for ICT developments contracted in the last quarter of 2015 (0,4 million euro) and investments in IT infrastructure (0,3 million euro) in view of the expected recruitment of additional staff following the decision of the budget authority at the end of 2015 to increase the establishment plan. |
OTHER COMMENTS
13. |
The Director of the Office approved a new policy for the recruitment of temporary and contract agents in November 2015. The new policy addresses most issues identified by the Court during past audits. Its implementation will be followed up in 2016 when a significant number of recruitments is expected. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 132, 29.5.2010, p. 11.
(2) More information on the Office’s competences and activities is available on its website: www.easo.europa.eu
(1) Budget figures are based on payment appropriations.
(2) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Office.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/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. |
Ongoing |
2013 |
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. |
Outstanding (1) |
2013 |
Six of the 16 internal control standards have not been fully implemented. |
Ongoing (2) |
2013 |
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. |
Ongoing |
2014 |
The Office, in its budget management system (ABAC) for the year 2014, carried over budgetary commitments amounting to some 1,3 million euro which were not covered by legal commitments. This is in contradiction with the Financial Regulation. Following the Court’s audit, the Office decided to correct the irregular carry overs and this is reflected in its final accounts for the year 2014. However, since the 2014 financial period was already closed, correction in the system was no longer possible and needs to be done in the 2015 financial period. |
N/A |
2014 |
The Office made 1 062 (28,6 %) payments after the time limits set in the Financial Regulation. The average delay for late payments was 24 days. |
Outstanding |
2014 |
Of the 689 875 euro of non-differentiated committed appropriations carried over from 2013, 146 417 euro (21,2 %) were cancelled in 2014 (2013: 16,5 %). This indicates weaknesses in the Agency’s budget planning and is at odds with the budgetary principle of annuality. Cancellations are mainly related to interim services and staff training courses as well as to administrative support services and translation costs. |
N/A |
2014 |
The Office implemented commitment appropriations of only 12,4 million euro, i.e. 84,7 % of the approved budget (2013: 10,5 million euro, i.e. 87,3 %). The level of committed appropriations for title II (administrative expenditure) carried over to 2015 was high at some 608 848 euro, i.e. 27,9 % (2013: 540 269 euro, i.e. 30,7 %) and mainly related to advisory and IT consultancy services delivered in 2014 but not yet invoiced or still to be delivered in 2015. |
N/A |
2014 |
The Office has a high staff turn-over, 14 staff left the Office in 2014, including four in key positions. This high turn-over of staff causes a considerable risk to the achievement of the objectives set in the annual and multi-annual work programme. |
Ongoing |
2014 |
According to a decision by the Executive Director, participants in meetings organized by EASO are classified in one of the three categories (A, B or C) for cost reimbursements. Total 2014 reimbursements to meeting participants amounted to 997 506 euro. Category ‘A’ participants, who are supposed to assume a specific duty in the meetings, receive a flat rate reimbursement for travel and daily subsistence costs, whereas Category ‘B’ participants receive a flat rate reimbursement for travel costs only. Category ‘C’ participants are not eligible for any reimbursement. The number of participants classified as recipients of category ‘A’ reimbursements increased from 61 % in 2013 to 69 % in 2014. There is no documentation justifying the classification of participants in the three categories. |
Ongoing (3) |
(1) In 2015, the Office made 1 024, i.e. 29,2 % payments after the time limits set in the Financial Regulation. The average delay for late payments was 29 days.
(2) At the end of 2015 one internal control standard had not yet been implemented.
(3) In 2015, reimbursements to meeting participants amounted to 987 515 euro. The number of participants classified as recipients of category ‘A’ reimbursements decreased from 69 % in 2014 to 52 % in 2015.
THE OFFICE’S REPLY
13. |
Concerning carry overs, these were planned in advance and well justified, due to EASO’s role in the migration crisis, in consideration of which the Budget Authority significantly increased EASO budget and staff for 2016. As a consequence, at the very end of 2015, EASO had to get ready to accommodate extra staff (+ 30 Temporary Agents) by procuring necessary goods and services. |
14. |
EASO is in line with the general comments of ECA, and is committed to have fully transparent recruitment procedures via the new EASO Recruitment Policy implementation. This is reflected in the recruitments from November 2015 onwards, addressing issues identified in past audits. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/72 |
REPORT
on the annual accounts of the European Banking Authority for the financial year 2015, together with the Authority’s reply
(2016/C 449/13)
INTRODUCTION
1. |
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. |
The table presents key figures for the Authority (2). Table Key figures for the authority
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
3. |
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 and an analysis of management representations. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
Other matter — event after balance sheet date
|
12. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
13. |
Carry-overs of committed appropriations for Title II (administrative expenditure) were high at 1 487 794 euro, i.e. 28 % of the total committed appropriations under this title (2014: 3 431 070 euro, i.e. 48 %). These include an unresolved issue regarding the outstanding VAT to be paid on the balancing charge of the Authority’s new building and an invoice concerning business rates by the UK Valuations Office (combined value 538 938 euro). |
14. |
Weaknesses were noted in the estimation of IT needs, in particular concerning outsourced services, which affect the Authority’s budgetary management of related expenses. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 4 October 2016.
For the Court of Auditors
Klaus-Heiner LEHNE
President
(1) OJ L 331, 15.12.2010, p. 12.
(2) More information on the Authority’s competences and activities is available on its website: www.eba.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Authority.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
(9) The Authority’s accountant signed the accounts on 24 May 2016.
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
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 (1). Total 2012 education contributions amounted to some 76 000 euro. They are not covered by the Staff Regulations and therefore irregular. |
Ongoing (2) |
2014 |
Carry-overs of committed appropriations for Title II (administrative expenditure) were high at 3 431 070 euro, i.e. 48 % (2013: 1 974 511 euro, i.e. 35 %) and mainly related to the Authority’s move to its new premises in mid-December 2014. |
N/A |
(1) Article 3 of Annex VII provides for twice the basic allowance of 252,81 euro = 505,62 euro.
(2) As at the end of 2015 the Authority had signed contracts with 20 of the 21 schools attended by children of staff members.
THE AUTHORITY’S REPLY
11. |
The Authority has taken note of the Court’s report. |
13. |
The EBA puts considerable effort into minimising carry-overs for justified needs. The carry-over referred to was justified. |
14. |
Outsourced services are governed by properly procured framework contracts. The use of these services is driven by the EBA work programme and is continuously monitored by IT and Finance. The EBA has further improved the documentation of its estimation of needs for procurement procedures. Compared to the 2015 initial budgetary appropriations allocated to IT costs, the EBA reduced the IT appropriations by just 4,3 % over the course of the year. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/77 |
REPORT
on the annual accounts of the European Centre for Disease Prevention and Control for the financial year 2015, together with the Centre’s reply
(2016/C 449/14)
INTRODUCTION
1. |
The European Centre for Disease Prevention and Control (ECDC — hereinafter ‘the Centre’), 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. |
The table presents key figures for the Centre (2). Table Key figures for the Centre
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON THE LEGALITY AND REGULARITY OF TRANSACTIONS
12. |
The Court found various weaknesses affecting the transparency of the audited procurement procedures, such as lack of a clear link with the Centre’s annual work programme, insufficient substantiation of the estimated contract value or absence of a financial benchmark (threshold) to assess the tenderer’s financial capacity. |
COMMENTS ON BUDGETARY MANAGEMENT
13. |
The overall budget execution rate was at 94 % (99 % in 2014). The decrease is related to the lower weighting factor applied to remunerations in Sweden as of 1 June 2014 and to delays in recruitments which resulted in lower than anticipated staff costs. |
14. |
Carry-overs of committed appropriations were high for Title II (administrative expenditure) at 1,6 million euro, i.e. 23 % (2014: 1,5 million euro, i.e.25 %). These carry-overs mainly relate to the procurement of IT hard- and software (0,8 million euro), as well as for real estate consultancy services for new premises (0,3 million euro) for which payments are only due in 2016. |
15. |
Carry-overs of committed appropriations were high for Title III (operational expenditure) at 7,5 million euro, i.e. 42 % (2014: 8,1 million euro, i.e. 49 %). The carry-overs mainly relate to multiannual projects (5 million euro) and IT support for operational activities (1,7 million euro) which were provided and paid as planned. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 142, 30.4.2004, p. 1.
(2) More information on the Centre’s competences and activities is available on its website: www.ecdc.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Centre.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court’s comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2012 |
In 2012, the Centre awarded grants to research institutions and individuals. Total grant expenditure amounted to 752 000 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, of audit certificates issued by independent audit firms contracted by the beneficiaries. The Centre does not usually obtain any documents from beneficiaries 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. Supporting documentation obtained by the Centre on the Court’s behalf provided reasonable assurance as to the legality and regularity of the transactions audited by the Court. |
Completed |
2014 |
The overall budget execution rate was high at 99 % (92 % in 2013). However, carry-overs of committed appropriations were also relatively high, at 1,6 million euro, i.e. 25 % for Title II — administrative expenditure (2013: 1,7 million euro, i.e. 26 %) and 8,1 million euro i.e. 49 % for Title III — operational expenditure (2013: 7,9 million euro, i.e. 44 %). Carry-overs for title II mainly related to the planned procurement of IT hardware and software (1 million euro) in the second half of 2014, for which payment is not due until 2015. For title III, carry-overs concerned multiannual projects (4,7 million euro), ICT to support operational activities (1,6 million euro) for which activities were implemented and payments were made according to operational needs, and expert consultation (1,2 million euro) for the organisation of meetings held in 2014 and not yet invoiced at year-end and meetings taking place in the first quarter of 2015. |
N/A |
THE CENTRE’S REPLY
13. |
ECDC has now made clearer the link between the procurement procedures and the annual work programme through the full implementation of a new version of the ECDC procurement monitoring application in 2016. The substantiation of estimated contract values is now requested prior to the launch of any procurement procedure above 25 000 euros. The financial threshold to assess financial capacity was introduced in 2016. |
14./15./16. |
The Centre acknowledges the comments of the Court of Auditors. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/82 |
REPORT
on the annual accounts of the European Chemicals Agency for the financial year 2015, together with the Agency’s reply
(2016/C 449/15)
INTRODUCTION
1. |
The European Chemicals Agency (hereinafter ‘the Agency’, aka ‘ECHA’), which is located in Helsinki, was set up by Regulation (EC) No 1907/2006 of the European Parliament and of the Council (1). Its main tasks are to ensure a high level of protection of human health and the environment as well as the free movement of substances on the internal market while enhancing competitiveness and innovation. The Agency also promotes the development of alternative methods for the assessment of hazards relating to substances. |
2. |
The Table presents key figures for the Agency (2). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON LEGALITY AND REGULARITY OF TRANSACTIONS
12. |
The Agency pays 50 % of the cost for after-school care of staff children in the European School in Helsinki. Its contribution is limited to 1 000 euro per child per annum and in total amounted to some 95 000 euro in 2015. This measure of a social nature was approved in 2008 by the Agency’s Director but has not been communicated to the budgetary authority in the framework of the budget procedure (9). |
COMMENTS ON BUDGETARY MANAGEMENT
13. |
Carry-overs of committed appropriations were high for Title IV (Biocides operating expenditure) at 1,5 million euro, i.e. 74 %. They mainly concern a large scale IT project (1,4 million euro). This project could only be started in the second half of 2015 when sufficient fee income for its funding had been collected. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 396, 30.12.2006, p. 1.
(2) More information on the Agency's competences and activities is available on its website: www.echa.europa.eu
(1) Budget figures are based on payment appropriations.
(2) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(3) These include the balance sheet and the statement of financial performance, the cash flow table, the statement of changes in net assets and a summary of the significant accounting policies and other explanatory notes.
(4) These comprise the budgetary outturn account and the annex to the budgetary outturn account.
(5) Articles 39 and 50 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).
(6) The accounting rules adopted by the Commission’s accounting officer are derived from the International Public Sector Accounting Standards (IPSAS) issued by the International Federation of Accountants or, where relevant, the International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.
(7) Article 107 of Regulation (EU) No 1271/2013.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
(9) Article 1 of Regulation No 31 (EEC), 11 (EAEC), laying down the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Economic Community and the European Atomic Energy Community (OJ 45, 14.6.1962, p. 1385).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
Budget implementation rates for the year 2014 improved in comparison with the previous year. The level of committed appropriations carried over to 2014 for titles III, IV, and V (operational expenses) was 8,5 million euro, i.e. 35 % (2013: 10,6 million euro, i.e. 46 %). These carry-overs mainly resulted from the multiannual nature of planned IT development projects (4,5 million euro), costs for translations ordered in 2014 but not received and paid by the end of the year (0,5 million euro) and substance evaluations with a regulatory deadline in 2015 (1,9 million euro). |
N/A |
The expenditure for procedures associated with one new specific activity of the Agency, the implementation of the Regulation concerning biocidal products, was to be, in principle, covered by application fees for the registration of these products. However, fees collected in 2014 covered only 17 % of this expenditure and the remaining part was in fact financed by contributions to the Agency’s budget from the Union (6,3 million euro) and EFTA countries (0,2 million euro) (1). |
Ongoing |
(1) Fees collected in 2015 covered 62 % of this expenditure.
THE AGENCY’S REPLY
12. |
ECHA will communicate this measure of a social nature to the budgetary authority in its Programming Document 2018-2020 and in ECHA’s Financial Statement 2018. In addition, ECHA will update the remarks on the relevant budget line in its first amending budget for 2016. |
13. |
ECHA appreciates the conclusion of the European Court of Auditors and will continue to be attentive to avoid any non-justified carry-over operations. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/87 |
REPORT
on the annual accounts of the European Environment Agency for the financial year 2015, together with the Agency’s reply
(2016/C 449/16)
INTRODUCTION
1. |
The European Environment Agency (hereinafter ‘the Agency’, aka ‘EEA’), which is located in Copenhagen, was established by Council Regulation (EEC) No 1210/90 (1). It is responsible for setting up an observation network to provide the Commission, the Parliament, the Member States and, more generally, the public with reliable information on the state of the environment. This information should, in particular, enable the European Union and the Member States to take action to safeguard the environment and assess the effectiveness of such action. |
2. |
The Table presents key figures for the Agency (2). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question |
OTHER COMMENTS
12. |
The audited procurement procedures showed that the Agency signed framework contracts with a single contractor which are used for various services under fixed-price specific contracts. As a consequence of requesting a fixed-price offer from a single contractor under these contracts, competition on price is neutralised and dependence upon the contractor is increased. The Agency should conclude agreements with multiple suppliers with reopening of competition or direct service contracts, whenever possible. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 120, 11.5.1990, p. 1.
(2) More information on the Agency's competences and activities is available on its website: www.eea.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2012 |
In 2012 the Agency awarded grants under three major grant programmes (1) to consortia consisting of environmental institutions and bodies in Europe, UN organisations and national environment organisations. Total grant expenditure in 2012 was 11,9 million euro, representing 27 % of the total operating expenditure. The Agency’s ex ante verifications before reimbursement of costs claimed by beneficiaries consist of a desk analysis of cost claims. It does not usually obtain from beneficiaries any document to substantiate the eligibility and accuracy of the staff costs claimed, which represent the main part of costs (2). |
Completed |
2013 |
In 2013 the Agency awarded grants under five grant programmes (3) to consortia consisting of environmental institutions and bodies in Europe, UN organisations and national environment organisations. Total grant expenditure in 2013 was 13,9 million euro, representing 31 % of total operating expenditure. The Agency’s ex ante verifications consist of a desk analysis of cost claims. Following the Court’s comment of last year, the EEA intensified its checks on the eligibility and accuracy of staff costs claimed under the grant programmes, as these represent the major part of costs. In particular, for a sample of beneficiaries, time sheets were obtained to check the salary costs claimed, but payslips have not been obtained. For the transactions audited by the Court supporting documentation was obtained which provided reasonable assurance as to their legality and regularity. |
Completed |
2012 and 2013 |
(Ex ante) On-the-spot verifications of costs [claimed under the grant programmes] at beneficiary level are rare (4). Existing controls therefore provide only limited assurance on the eligibility and accuracy of the costs claimed by beneficiaries. |
Ongoing (5) |
2014 |
In 2014 the Agency launched a call to procure services to provide IT and Geographic Information Systems (GIS) consultancy services for the implementation of Reference Data Access (RDA) component and for supporting EEA in other Copernicus related activities to the value of 1,7 million euro. An important aspect of the tender referred to as ‘known shortcomings’ was not defined anywhere in the technical specifications. Clearer tender specifications would have contributed to a more effective and competitive procurement procedure. |
N/A |
2014 |
Although the EEA has started to implement a new ex-ante and ex-post control policy for grants, the verification procedures have not yet been documented. However, guidelines have been issued to beneficiaries (European Topic Centres or ETC) on the preparation of cost statements |
Completed |
2014 |
Weaknesses were nevertheless noted for the grant transactions audited. For one of the ETCs, the verifying officer had identified the inclusion of ineligible expenditure within the cost claim but the authorising officer approved the full amount claimed. In a second case, the full cost claim was paid even though most of the partners selected for ex ante verification had not provided the EEA with the requested documents. |
N/A |
2014 |
Furthermore, the internal auditor was involved in both ex ante and ex post verifications: these are incompatible tasks. It should be noted that the system of ex ante controls has been the subject of discussion between the Court and the Agency since 2012. |
Ongoing |
2014 |
The Agency has contracted backup services, including email services, with a cloud services provider using an interinstitutional contract procured by DIGIT. The conditions of the contract do not adequately define the location of the Agency’s data. The contractor has reserved the right to transfer the Agency’s data outside the geographic area of the European Union without notice, e.g. to address latency issues, routing data may need to be copied to different data centres in different regions. Consequently the Agency has not ensured that the privileges and immunities of the European Communities, to which it is subject, are guaranteed and that the service provider fully respects the privacy guarantees granted by Article 7 of the EU Charter of Fundamental Rights. |
Outstanding (6) |
(1) European Topic Centres (ETC), European Neighbourhood Partnership Instrument (ENPI) and Global Monitoring for Environment and Security Initial Operations (GIO).
(2) For other types of costs (i.e. sub-contracting, acquisition of equipment), supporting documents are requested and analysed.
(3) European Topic Centres (ETCs), European Neighbourhood Partnership Instrument (ENPI) Global Monitoring for Environment and Security Initial Operations (GIO and GIO2), GMES in-situ coordination (GISC) and Instrument for Pre-Accession Assistance (IPA2).
(4) In 2012 and in 2011 one ex ante verification was carried out to check one beneficiary’s control systems. In 2010 one ex ante verification had been carried out to check the eligibility of expenditure declared by one beneficiary.
(5) The Agency carried out five on-the-spot ex-ante verifications related to payments to ETCs for the financial years 2015, 2014 and 2013.
(6) The Agency considers this issue to be closed following the amendments of the contract. The Court’s assessment is subject to the outcome of the pending legal case Microsoft vs. United States (No. 14-2985-cv).
THE AGENCY’S REPLY
12. |
The Agency wishes to emphasise that the level of competition of the particular market of satellite imagery production and analysis is relatively limited due to the few number of service providers operating in the related sectors and the stability and consistency of the prices applied. Furthermore the technical nature and complexity of the services to be provided require the combination of different expertise that the service providers operating in this market can only provide when joining forces into a consortium. The choice of awarding a framework contract with a single economic operator is therefore a conscious one resulting from an assessment of tangible factors rather than hypotheses. Annex, comment 2012 and 2013: Following the Court’s comment on grants related to financial years 2012 and 2013, five on-the-spot ex ante verifications related to payments to European Topic Centres (ETCs) for the financial years 2013, 2014 and 2015 were performed. Further to these on-the-spot verifications, which covered 20 % of the total staff costs claimed by all beneficiaries, 0,12 % of the controlled costs were declared non-eligible. The EEA verification policy on ETC from May 2014 ensured that the controls performed by means of request of supporting documentation give assurance on the eligibility and accuracy of the costs claimed by beneficiaries. This policy has been revised in October 2015 and since then the Internal Audit Capability carries out exclusively ex-post on-the-spot verifications, the first of which having taken place in spring 2016. In addition, further to an external assessment performed in 2015, the Agency’s Internal Audit Capability was certified as compliant with the IIA standards which examine in particular the independence of the function. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/93 |
REPORT
on the annual accounts of the European Fisheries Control Agency for the financial year 2015, together with the Agency’s reply
(2016/C 449/17)
INTRODUCTION
1. |
The European Fisheries Control Agency (hereinafter ‘the Agency’, aka ‘EFCA’), which is located in Vigo, was established by Council Regulation (EC) No 768/2005 (1). The Agency’s main task is to organise the operational coordination of fisheries control and inspection activities by the Member States in order to ensure an effective and uniform application of the rules of the common fisheries policy. |
2. |
The Table presents key figures for the Agency (2). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON INTERNAL CONTROLS
12. |
The Agency is not yet fully complying with Internal Control Standards 10 (Business Continuity), 11 (Document Management) and 12 (Information and Communication) (9). |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 128, 21.5.2005, p. 1.
(2) More information on the Agency’s competences and activities is available on its website: www.efca.europa.eu.
(1) Budget figures are based on payment appropriations.
(2) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
(9) The Agency’s Internal Control Standards are based on the equivalent standards laid down by the Commission.
THE AGENCY’S REPLY
12. |
EFCA assesses yearly the level of implementation of the internal control standards and reports the result in its Annual Report. The main developments expected for each standard are also reported in the Annual Report. EFCA is aware of the level of implementation of each standard and the associated risk, and accordingly, within the resources available, is implementing these developments to enhance the degree of implementation. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/97 |
REPORT
on the annual accounts of the European Food Safety Authority for the financial year 2015, together with the Authority’s reply
(2016/C 449/18)
INTRODUCTION
1. |
The European Food Safety Authority (hereinafter ‘the Authority’, aka ‘EFSA’), which is located in Parma, was established by Regulation (EC) No 178/2002 of the European Parliament and of the Council (1). The Authority’s main tasks are to supply the scientific information needed for Union legislation to be drawn up concerning food and food safety, to collect and analyse data that allow risks to be identified and monitored and to provide independent information on these risks. |
2. |
The Table presents key figures for the Authority (2). Table Key figures for the Authority
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
3. |
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 and an analysis of management representations. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON INTERNAL CONTROLS
12. |
The Authority has not yet put in place a clear and comprehensive financial ex-post control strategy covering all areas of operations and specifying the frequency and scope of such controls. |
FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS
13. |
An overview of the corrective actions taken in response to the Court’s comments from the previous years is provided in the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(2) More information on the Authority’s competences and activities is available on its website: www.efsa.europa.eu
(1) Budget figures are based on payment appropriations.
(2) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Authority.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court’s comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2012 |
Following high level risk assessments carried out by an external consultation 2012 and by the Commission’s Internal Audit Service in February 2013 a number of potential critical risks were identified in the operation of the Authority’s internal controls, particularly in the areas of data management, business continuity and IT security. The Authority started a comprehensive self-assessment of its internal control system in 2012. The process is on-going and implementation of corrective actions is planned for 2013. |
Completed for data management and IT security Ongoing for business continuity |
2014 |
In 2005 new EU Staff Regulations entered into force, including provisions that future remunerations of officials recruited before 1 May 2004 should not be less than under the previous EU Staff Regulations. The Court’s audit revealed that this was not complied with and, in the case of 8 of the 71 officials employed at that time, this led to a total underpayment of 87 000 euro for the period 2005 to 2014. The Authority will make the supplementary salary payments in due course. |
Completed |
THE AUTHORITY’S REPLY
12. |
EFSA welcomes the unqualified opinions issued by ECA on the reliability of the accounts and on the legality and regularity of the transactions underlying the accounts. This evidences that the control system in place at EFSA adequately ensures overall compliance. Internal control system are always perfectible, hence EFSA will consider the comment of ECA and whether this optional and additional control step fits for purpose in a risk-based assessment environment. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/102 |
REPORT
on the annual accounts of the European Institute for Gender Equality for the financial year 2015, together with the Institute’s reply
(2016/C 449/19)
INTRODUCTION
1. |
The European Institute for Gender Equality (hereinafter ‘the Institute’, aka ‘EIGE’), which is located in Vilnius, was established by Regulation (EC) No 1922/2006 of the European Parliament and of the Council (1). The Institute’s task is to collect, analyse and disseminate information as regards gender equality and to develop, analyse, evaluate and disseminate methodological tools in order to support the integration of gender equality into all Union policies and the resulting national policies. |
2. |
The Table presents key figures for the Institute (2). Table Key figures for the Institute
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
3. |
The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of key controls of the Institute’s supervisory and control systems. This is supplemented by evidence provided by the work of other auditors and an analysis of management representations. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
The level of committed appropriations carried over under Title III remained high at 61 % (2014: 54 %). This mainly results from the nature of activities of the Institute which involve procuring studies that span over many months, often beyond 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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 403, 30.12.2006, p. 9.
(2) More information on the Institute’s competences and activities is available on its website: www.eige.europa.eu.
(1) Staff includes officials, temporary and contract agents and seconded national experts.
Source: data provided by the Institute.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
The level of carry-overs for committed appropriations was high for title III (operational expenditure) at 1,8 million euro, i.e. 54 % (2013: 2,0 million euro, i.e. 56 %). The main reasons were delayed procurements of surveys and studies and ongoing studies which are expected to be finalised as planned in 2015. |
N/A |
THE INSTITUTE'S REPLY
12. |
Agreed. Even though EIGE puts all efforts to decrease the amount of carry overs in the operational budget, operational delays are due to circumstances often outside EIGE’s control, e.g. a delayed decision by the Presidency of the Council of the EU regarding the subject of a study. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/107 |
REPORT
on the annual accounts of the European Insurance and Occupational Pensions Authority for the financial year 2015, together with the Authority’s reply
(2016/C 449/20)
INTRODUCTION
1. |
The European Insurance and Occupational Pensions Authority (hereinafter ‘the Authority’, aka ‘EIOPA’), which is located in Frankfurt, was established by Regulation (EU) No 1094/2010 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 the protection of policyholders, pension scheme members and beneficiaries. |
2. |
The table presents key figures for the Authority (2). Table Key figures for the authority
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
3. |
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 and an analysis of management representations. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
The level of committed appropriations carried over is high for Title III (operational expenditure) at 2,3 million euro, i.e. 45 % (2014: 4,7 million euro or 66 %). These carry-overs are mainly related to specific contracts for operational information and data management (1,9 million euro), whereby contracts amounting to 0,9 million euro were signed late in the year, mainly for services to be provided in 2016. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 331, 15.12.2010, p. 48.
(2) More information on the Authority’s competences and activities is available on its website: www.eiopa.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Authority.
(3) These include the balance sheet and statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
The overall level of committed appropriations was high at 95 %. The level of committed appropriations carried over also remained high at 5,6 million euro, i.e. 26 % (2013: 5,2 million euro, i.e. 28 %), particularly for the operational budget (Title III) at 4,7 million euro, i.e. 66 % (2013: 3,7 million euro or 85 %). Carry-overs are mainly related to specific contracts with a cumulative value of 2,4 million euro signed late in the year, particularly for the ongoing development and maintenance of a database (1,8 million euro) and other IT services to be provided in 2015. Part of the committed appropriations carried over are related to budget transfers made in November and December 2014, when the Authority increased the operational budget (Title III) by 1,1 million euro (19 %) (1) through transfers from the staff budget (Title I) of 858 828 euro (2) and from administrative expenditure (Title II) of 266 360 euro (3). The transfers were intended to compensate for shortfalls in the Authority’s 2015 budget following substantial budget cuts decided by the discharge authorities. These shortfalls would not have allowed the Authority to continue implementing its multiannual IT strategy, which was one of its core operational activities. |
Ongoing |
2014 |
Although budget transfers, carry-overs and related commitments are in line with the specific provisions of the EU Financial Regulation and were executed following Management Board decisions, the extent to which 2015 activities will be covered by 2014 appropriations is at odds with the budgetary principle of annuality. There is a need to better align the funds made available in the agency’s annual budgets with the financial needs for the implementation of its multiannual IT strategy. |
Ongoing |
(1) 2015: 0,6 million euro (16 %).
(2) 2015: 317 737 euro.
(3) 2015: 322 737 euro.
THE AUTHORITY’S REPLY
12. |
The relatively high carry-over percentage was mainly due to the execution of EIOPA’s multiannual IT programme supporting the Solvency II implementation. Improvements have been made in the past years which have substantially decreased the carry over levels from 2013 to 2016. The carry-over appropriations will be reduced from 2016 onwards to a satisfactory level with the advanced implementation of EIOPA’s IT programme. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/112 |
REPORT
on the annual accounts of the European Institute of Innovation and Technology for the financial year 2015, together with the Institute’s reply
(2016/C 449/21)
INTRODUCTION
1. |
The European Institute of Innovation and Technology (hereinafter ‘the Institute’, aka ‘EIT’), which is located in Budapest, was created by Regulation (EC) No 294/2008 of the European Parliament and of the Council (1). The Institute’s objective is to contribute to sustainable European economic growth and competitiveness by reinforcing the innovation capacity of the Member States and the European Union. The Institute awards grants to an increasing number of ‘Knowledge and Innovation Communities’ (KICs), linking the higher education, research and business sectors with one another and aiming thereby to boost innovation and entrepreneurship. KICs coordinate the activities of hundreds of partners. The grants provided by EIT reimburse partners’ costs and costs stemming from the KICs’ coordination activities. |
2. |
The Table presents key figures for the Institute (2). Table Key figures for the Institute
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
3. |
The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of key controls of the Institute’s supervisory and control systems. This is supplemented by evidence provided by the work of other auditors and an analysis of management representations. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Basis for qualified opinion on the legality and regularity of the transactions underlying the accounts Irregular flat rate for calculating indirect eligible costs related to grants
Outcome of the 2014 grant transactions ex post verification
Combined error rate
Qualified opinion on the legality and regularity of the transactions underlying the accounts
|
17. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON THE LEGALITY AND REGULARITY OF TRANSACTIONS
18. |
In 2015, the Institute informed the KICs that its financial contribution over the first 5 years (2010-2014), did not exceed the 25 % ceiling of their respective global expenditure. However the poor definition of KIC Complementary Activities (‘KCA’) impaired any clear assessment as to whether costs associated to KCA should be accepted or not in the maximum EIT contribution. The Court in its Special Report 4/2016 concluded that this funding condition (which continues to be applied in the new period 2014-2020) is of little or no added value, and removing it would alleviate much of the operational and financial reporting burden of the KIC partners (12). |
COMMENTS ON INTERNAL CONTROLS
19. |
The Certificate of Financial Statement (‘CFS’) requested from KIC partners claiming reimbursement of more than 325 000 euro shall contribute to the Institute’s ex ante verification of cost statements (13). However, the quality of these certificates varies significantly, limiting the assurance that can be obtained from them and requiring the Institute to carry out additional checks. |
COMMENTS ON BUDGETARY MANAGEMENT
20. |
The EIT founding regulation provides that ‘the EIT shall mobilise funds from public and private sources and use its resources in accordance with this Regulation. It shall in particular seek to raise a significant and increasing proportion of its budget from private sources and from income generated by its own activities.’ (14). In spite of the said provision that clearly refers to the EIT budget, the contribution from the Horizon 2020 financial envelope accounted for 99 % of its 2015 budget. |
21. |
Even though the Institute is allowed to re-enter unused appropriations (appropriations not committed during the year or de-committed by the year end) in the budgets of the following 3 years (15), it had not adapted its process in time to re-enter 26,6 million euro available from the 2014 grant agreements in the 2015-2017 budgets. These appropriations result from the lower than expected use of funds by KICs. |
22. |
The level of carry-overs for committed appropriations was high for Title II at 0,4 million euro, i.e. 44 % (2014: 0,5 million euro, i.e. 36 %). These carry-overs mainly relate to contracts for IT services going beyond year end and for meetings for which invoices had not yet been received. |
OTHER COMMENTS
23. |
The original target set by the Commission for the Institute to obtain financial autonomy was 2010. However it obtained only partial financial autonomy in June 2011 under the condition of continued ex ante approval of grant related transactions and of procurements above 60 000 euro by its (parent) Directorate General Education and Culture. |
24. |
The 2014 grant agreements with the three KICs were signed after the start of the grant funded actions on 1 January 2014. Initially signed in February 2014, amendments involving 38 million euro of additional funds were signed only by the end of March 2014. |
25. |
The Institute funds the EIT Digital Master’s programme in which 16 European universities participate. The model for reimbursing the universities’ costs combines a lump sum maximum 8 000 euro per student (following the Erasmus Mundus programme provisions) plus actual costs including flat rate based indirect costs. On average a total of 15 000 euro per student was paid to the universities in 2015 on this basis (including the lump sum). However, the model has never been formally defined and does not allow a distinction between activities covered by the lump sum and those covered by the actual costs. The Institute should move towards a clear and formally defined model based on a single method for declaring costs such as a substantiated single lump-sum. |
26. |
Based on the decision of the KIC Supervisory Board one KIC legal entity paid gross bonuses of 646 000 euro to 55 of its staff (individual bonuses as much as 100 000 euro) which the Institute reimbursed at 100 %. Paying such bonuses using only public funds is an unusual practice and they should be taken into account in the ceiling for the EIT funding of individual salaries which will be applied with effect from the 2016 grant agreement. This principle of sound financial management was also breached when a KIC partner procured public relations services with daily rates ranging from 800 euro to 3 250 euro per person, which were also fully reimbursed by the Institute. |
27. |
The Institute used a Commission framework contract (‘FWC’) for the organisation of innovation conferences taking place in 2015 and 2016. Under this FWC services were subcontracted for which prices were not set in the FWC. The prices agreed for these services range from 800 euro per day for a junior consultant to 2 250 euro per day for a senior consultant (almost four times the price agreed in the FWC for a senior manager). The cost of services procured at such prices amount to more than 100 000 euro per conference. |
FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS
28. |
An overview of the corrective actions taken in response to the Court's comments from previous years is provided in the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(2) More information on the Institute's competences and activities is available on its website: www.eit.europa.eu
(1) Budget figures are based on payment appropriations.
(2) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Institute.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
(9) OJ L 412, 30.12.2006, p. 1.
(10) Article 90(1) of the EIT Financial Regulation
(11) The 2015 grant transactions include the final payments and clearings of pre-financings made in 2015 for grants amounting to 183,3 million euro.
(12) Special Report 4/2016: The European Institute of Innovation and Technology must modify its delivery mechanisms and elements of its design to achieve the expected impact.
(13) Article 34 of Regulation (EU) No 1290/2013 of the European Parliament and of the Council (OJ L 347, 20.12.2013, p. 81).
(14) Article 5(1)(d) of Regulation (EC) No 294/2008.
(15) Article 14(1) of the EIT Financial Regulation.
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2012 |
In addition to the matter described in paragraphs 9 to 13, budgets for grant agreements signed in 2010 and 2011, which resulted in payments in 2012, were not sufficiently specific. There was no link between the approved funds and the activities to be implemented. [Grant agreements…] and did not include rules for the procurement of goods and services by the KICs and their partners. |
Completed |
Grant agreements did not set individual thresholds for specific cost categories (i.e. staff costs, sub-contracting, legal services, etc. |
Outstanding (1) |
|
2012 |
EIT also carried out technical verifications for all funded projects as part of its ex ante verifications. However, there was a lack of quantifiable targets that hampered an effective assessment of project activities and results. Business plans did not define in detail the activities to be implemented; nor did they set clear milestones, deliverables per activity or quality criteria. |
Completed |
2012 |
Out of the committed appropriations carried over from 2011 amounting to some 22 million euro, some 10 million euro (45 %) were cancelled in 2012. The high level of cancellations is mainly due to lower than estimated costs claimed by beneficiaries under 2011 grant agreements (9,2 million euro or 92 % of cancelled carry-overs). |
N/A |
2013 |
The Framework Partnership Agreements (FPA) with the three KICs stipulate that the EIT financial contribution may cover up to 25 % of the KIC’s global expenditure over the first 4 years, from 1 January 2010 to December 2013. According to the figures reported by the KICs, this ceiling was respected by all three KICs. However, as these figures will not be audited before 2015, there is no appropriate audit evidence that the EIT funding did not exceed this 25 % ceiling. |
Completed |
2014 |
The EIT has gradually improved its financial verification of the KICs’ cost claims. However, the operational verification of deliverables is lagging behind. The KICs’ annual business plans still include an inadequate definition of deliverables and there is no clear link between planned deliverables and eligible cost per partner and cost category. Also, the Court has found cases where the full amount of the EIT grant was paid out even if some of the objectives set in the business plan have not been achieved. |
Completed |
2014 |
The Institute overestimated its budgetary needs for 2014 by 13,1 million euro, i.e. 5,6 % (2013: 3,4 million euro, i.e. 2,5 %) and only 220 million of the 233,1 million euro available were committed. The low implementation rate is mainly related to non-used appropriations for grants (11,4 million euro) to fund KIC activities. The KIC’s business plans, on the basis of which grant agreements were signed, did not require the use of total 2014 appropriations available to the Institute. The appropriations not used will be re-entered in the Institute’s budgets for the years 2015-2017 as stipulated in the Institute’s Financial Regulation. |
Ongoing (2) |
2014 |
While the KICs are to develop strategies for financial sustainability, to date, and in the fifth year of their existence, they remain fully dependent on financing by the Institute and KIC partners. |
Ongoing (3) |
2014 |
Since its creation in 2009, the Institute has suffered from high staff turnover and instability at management level. In June 2014, the Governing Board decided to second the Institute’s Director on a long-term research mission to the European University Institute in Florence for the remaining eleven months of his mandate. The interim Director took over duties in August 2014 (just after his recruitment and appointment as Chief Operating Officer (COO)) and is now the fourth person occupying the Director’s post within a period of 6 years. The vacancy notice to recruit a new Director was published in July 2015. |
Ongoing (4) |
2014 |
Two of the three Head of Unit posts have been vacant since 2013. One is occupied ad interim since 2013 which is in contradiction with the Staff Regulations that stipulate a maximum period of 1 year. The other is currently occupied by the COO who also serves as the interim Director and who thus fulfils three roles at the same time. |
Ongoing (5) |
2014 |
Although the situation has improved in comparison with 2013, 20 % of the posts in the EIT establishment plan were still vacant at the end of 2014 (compared with one third at the end of 2013). |
Ongoing (6) |
2014 |
Emphasis of matter Without calling into question the unqualified opinion expressed in paragraph 9, the Court draws attention to the fact that the EIT financial contribution may not exceed 25 % of the KIC’s global expenditure over the first 5 years, from 1 January 2010 to 31 December 2014. According to the figures reported by the KICs, this ceiling was respected. The EIT obtained audit certificates by 31 March 2015 on the costs of KIC complementary activities (KCA) incurred during 2010-2014. In addition to obtaining the audit certificates, in 2015 the EIT conducted a review of the portfolio of KIC complementary activities to ensure that only those activities are accepted that meet all legal and operational requirements set for KCAs including to have a link with KIC added value activities funded by the EIT. |
Completed |
(1) The EIT has introduced ceilings for the maximum EIT contribution to the overall management and overhead costs of KICs as well as for the costs of individual KIC management staff members starting from 2016. However it has not planned any further specific corrective actions in response to this matter as outlined in its reply to the Court’s Specific Annual Report for the financial year 2012.
(2) Budgetary needs for 2015 were overestimated by 25 million euro, i.e. 9,4 %; only 241,6 million euro appropriations available were committed. The reason for the low implementation rate remained the same. The appropriations not used can be re-entered in the budgets for 2016-2018.
(3) Revenue declared by KIC partners under 2014 GA amounted to 0,3 million euro.
(4) Staff turnover rate in 2015 was 17 % (posts staffed at the beginning of the 2015). The procedure for the appointment of a new Director is still ongoing.
(5) One vacant head of unit post has been staffed; the other head of unit post is still vacant and filled on ad interim basis since 2013.
(6) 16 % of the posts in the Institute’s establishment plan were vacant at the end of 2015.
THE INSTITUTE’S REPLY
10-13. |
The EIT disagrees with the conclusion of the Court of Auditors, as no ‘overpayment’ or irregular payment was made for the reimbursement of indirect costs of Knowledge and Innovation Communities (KICs) under the 2014 grant agreements. The EIT is part of the Horizon 2020 framework programme and has to apply the rules of the Horizon 2020 Rules for Participation and Dissemination starting from 1 January 2014. Article 57(2) of the Horizon 2020 Rules for Participation and Dissemination provides explicitly for the following transitional measure: ‘this Regulation shall not affect the continuation or modification including the total or partial termination, of the actions concerned, until their closure, or until the award of financial assistance by the Commission or funding bodies under Decision No 1982/2006/EC or any other legislation applying to that assistance on 31 December 2013, which shall continue to apply to the actions concerned until their closure’. The EIT qualifies as ‘funding body’ and the EIT Regulation qualifies as ‘any other legislation’ in application of this particular provision. The legislation applicable to the EIT financial assistance on 31 December 2013, the EIT Financial Rules, explicitly allowed the use of a 40 % flat rate for reporting indirect costs by higher education institutions, research organisations, non-profit public bodies and SMEs. Therefore, the use of the flat rate of 40 % by these bodies was legal and regular under the 2014 grant agreements. Consequently, the EIT does not accept the conclusion of the Court of Auditors, as no overpayment was made. While the EIT indeed notified the KICs in October 2013 of potential changes in the rules for reporting indirect costs under Horizon 2020, this notification happened before the Horizon 2020 Rules for Participation and Dissemination, including the above mentioned transitional measures in Article 57, were adopted by the European Parliament and the Council on 11 December 2013. Based on the transitional measures adopted, the EIT did not need to disallow the use of a 40 % flat rate for reporting indirect costs by higher education institutions, research organisations, non-profit public bodies and SMEs. In order to provide the relevant context, it is important to recall the process how the 2014 grant agreements were established. The 2014 EIT-KIC grant agreements were based on the 2014 Business Plans of KICs that were prepared by the Knowledge and Innovation Communities during 2013. The annual call for the 2014 Business Plans was launched by the EIT by sending the Business Plan guidance to the KICs in April 2013. In line with the guidance provided by EIT, KICs developed in consultation with their partnership and submitted their 2014 Business Plans to the EIT by 30 September 2013. Following the evaluation of the 2014 Business Plans by the EIT, supported with external experts, the EIT Governing Board decided on the 2014 funding allocation to KICs on 5 December 2013. Based on this decision of the Governing Board, KICs amended their Business Plans in January 2014 in order to align them with the funds allocated. The grants were awarded by the EIT Director and the grant agreements were signed in February 2014. In line with the principle of legal certainty, funding rules shall not be changed after a call for proposal has been launched. Therefore, and in line with the transitional arrangements provided by the Horizon 2020 Rules for Participation and Dissemination, the entry into force of the new Regulation on the Horizon 2020 Rules for Participation and Dissemination should not have affected the continuation of the actions concerned (i.e. the 2014 Business Plans of the KICs, which were established and assessed by the EIT in 2013) until the award of financial assistance by the EIT. This award should have been carried out under the legislation applicable on 31 December 2013. The EIT was indeed not part of the Seventh Framework Programme for research, technological development and demonstration activities (FP7). However, the EIT is part of Horizon 2020 and the majority of KIC Partners are beneficiaries under both FP7 and other Horizon 2020 programmes, too. Therefore, it is coherent to apply the same 40 % flat rate to the transition from the pre-H2020 EIT financial assistance to Horizon 2020 as from FP7 to Horizon 2020. Besides, it is important to recall that calls for proposals under FP7 were launched by DG Research and Innovation until as late as December 2013 and grant agreements resulting from those calls were signed until as late as October 2014. Many of those grant agreements are still running in 2016 and follow the rules of the FP7 legal framework based on the same transitional provisions of the Horizon 2020 Rules for Participation and Dissemination. The EIT did not provide preferential treatment to its beneficiaries (KIC Partners) affected by the 40 % flat rate in the 2014 grant agreements. |
14. |
As reported in the EIT Consolidated Annual Activity Report for 2015, the residual error rate of 2015 grant transactions, made under the 2014 grant agreements, after ex ante and ex post controls is 1,46 %. |
15. |
For the reasons described in the replies to paragraphs 10 to 14, the error rate of 2015 grant transactions, as calculated by the EIT, is 1,46 %. |
18. |
The EIT had obtained audit certificates from independent auditors on the costs of KIC complementary activities by 31 March 2015 in order to ensure that the EIT financial contribution did not exceed the 25 % ceiling over the years 2010-2014. On the basis of the audited figures, the funding percentages for the period 2010-2014 are as follows: Climate KIC — 16 %, KIC InnoEnergy — 19 % and EIT Digital — 21 %. As the percentages are well below the 25 % ceiling set out in the EIT-KIC Framework Partnership Agreements, the EIT has obtained assurance on compliance with the applicable legal basis. Nevertheless, the Commission and the EIT accepted the recommendation of the Court’s Special Report 4/2016 to propose an amendment to the EIT legal basis removing the 25 % funding condition in order to alleviate the operational and financial reporting burden on the KIC Partners. Until such an amendment is adopted, the EIT will implement the currently applicable legal basis. |
19. |
The EIT applies the audit certificate methodology devised by DG Research and Innovation for the Horizon 2020 framework programme starting from the 2014 grant agreements. The revised methodology includes more detailed instructions and agreed upon procedures as well as 63 standard factual findings covering all cost categories. Furthermore, the EIT has developed a comprehensive grant assurance strategy that is built on both ex ante and ex post verification, including the CFS, in order to ensure the legality and regularity of transactions. |
20. |
The EIT interprets the applicable legal basis differently. Recital (16) of the EIT Founding Regulation provides an explanation of Article 5(d) of said Regulation as follows: ‘Therefore, it is expected that industry, the finance and service sectors will contribute significantly to the budget of the EIT and, in particular, to the budget of the KICs. The KICs should aim at maximising the share of contributions from the private sector.’ In this light, the EIT is of the opinion that the EIT shall primarily mobilise funds from public and private sources via its Knowledge and Innovation Communities. Therefore, the EIT interprets the quoted article as including the budget of KICs when the EIT budget is referred to. In this light, the EIT has been successful in mobilising funding from other public and private sources via its Knowledge and Innovation Communities. The share of funding from sources other than the EIT to the budget of the three first wave KICs concerns for the most part the complementary activities declared by the KICs and was 84 % (Climate-KIC), 81 % (KIC InnoEnergy) and 79 % (EIT Digital), respectively, in the period 2010-2014. |
21. |
The amount of 26,6 million euro unspent by KICs from the 2014 grant agreements became known to the EIT when KICs claimed the actual amount of 187,2 million euro in March 2015. At that time, it was not possible anymore to cancel the unused appropriations entered for year 2014, which only then could have been re-entered during the next three years. As a direct consequence of the lessons learnt in the framework of the 2014 grant agreements, the EIT carried out a budget review and the KICs were requested to revise their 2015 Business Plans and Budgets in October 2015 and they submitted amended Business Plans and Budgets in November 2015. As a result of the reduction in KIC Budgets, the EIT could decommit unspent amounts, which have then been cancelled and re-entered in the estimate of revenue and expenditure for 2016. This shows that, in close collaboration with the KICs, the EIT management of the budget has significantly improved. In this context, the recommendations of the Court of Auditors in Special Report 4/2016 are relevant. EIT-KIC grant agreements signed before the start of the activities and covering a longer period than the calendar year should improve the absorption of available funds by the KICs. |
22. |
The total amount reported by the Court consists of planned carry-overs that was necessary due to the nature of activities such as services going beyond year-end and meetings held in December 2015 for which invoices were only received in January 2016. These planned carry-overs do not indicate weaknesses in the budgetary management of the EIT but are a standard budget management tool. |
23. |
The EIT requested the Commission to re-launch the process leading to full financial autonomy. The Commission set out the roadmap and timetable of the process in May 2016. According to the indicative timetable, the Commission will complete its financial autonomy assessment report in December 2016-January 2017. |
24. |
Due to the annual nature of the EIT’s budget, and the fact that the EU budget is generally not adopted before mid-December, grant agreements for a given year cannot be signed before 1 January of that particular year. The EIT committed itself to decrease the gap between the starting date of the action as defined in the KICs’ Business Plans and the date of signature of the grant agreements. As a result of this effort, the 2014 grant agreements were signed with the three KICs in February 2014. As regards the amendments of grant agreements signed in March 2014, it is important to note that significant uncertainties surrounded the EIT’s 2014 annual budget due to the ongoing negotiations related to the 2014-2020 Multiannual Financial Framework and Horizon 2020. Therefore, the EIT Governing Board took a prudent approach and decided in September 2013 to allocate only 180 million euro, as a first tranche, for the 2014 grant agreements. After the 2014 annual budget had been confirmed, the EIT awarded further grants totalling 38,5 million euro, as a second tranche, to the three KICs in March 2014. |
25. |
The education activities covered by lump sums and actual costs can be distinguished in the EIT Digital Masters Programme. The lump sum tuition fees cover the costs of the universities related to the participation of students in technical courses. On the other hand, the activities reported based on actual costs relate to the EIT Digital specific learning outcomes and provide added value for students compared to the standard masters programmes offered by the participating universities. The EIT accepts that it should move towards a single lump sum model for financing KICs’ masters programmes in order to simplify the cost reporting, once sufficient statistical data is available to establish such a single lump sum in line with the provisions of Article 124(2) of the EU Financial Regulation. |
26. |
The EIT is of the opinion that bonuses, as variable components of the basic remuneration of KIC management staff, comply with all relevant rules and regulations, in particular section 1.1.3 of Horizon 2020 Annotated Model Grant Agreement which defines the eligibility conditions for variable components paid by beneficiaries. More precisely, the variable complements were authorised by the employment contracts, they were determined on the basis of objective conditions, which were documented by the KIC Legal Entity and verified by EIT. The net amount actually paid to employees depends on the applicable withholding tax rate and the employees’ individual tax situation. On the basis of a tax rate of ca. 40 %-50 % of the gross amount reported by the Court of Auditors, the net amount was on average around 6 000-7 000 euro per person. While the practice of reimbursing bonuses, as variable and performance-based components of remuneration, may be unusual, the objectives pursued by KICs as business-driven organisations, such as aiming for financial sustainability, are also unusual and cannot be found in other programmes. The use of variable elements as part of the basic remuneration can provide a strong incentive for good performance and ensure that value for money is achieved. In fact, performance-based remuneration of KIC management staff is considered most appropriate in a business-driven model. Furthermore, it is important to note that the EIT contribution to salaries paid to KIC management staff, including bonuses will be kept below the ceiling established by the EIT in 2016 grant agreements. Finally, the EIT is of the opinion that Recommendation No 3 of the Court of Auditors’ Special Report 4/2016 is relevant in this context. According to the Court of Auditors, ‘the EIT should seek greater autonomy and make use of the flexibility in Horizon 2020’s legal basis. In particular, it should adopt specific rules tailored to the needs of the KIC partners.’ This is exactly what the EIT has done when accepting the performance-based remuneration system introduced by the KIC Legal Entity in question. As regards the public relations services procured by another KIC Partner, a renowned public university, it is important to note that the subcontractor providing the public relations services had been selected in a competitive tendering process carried out in full compliance with the procurement rules of the KIC Partner. Therefore, the EIT is of the opinion that best value for money has been ensured and the principles of sound financial management have been complied with. The audit conclusion on sound financial management is unclear, as no comparable benchmark prices have been provided by the Court for the services procured by the KIC Partner. |
27. |
The subcontractor was identified and contracted by the Framework Contractor in line with the provisions of the Commission Framework Contract. It provided specialist services such as developing a concept outline for INNOVEIT, designing an attractive and coherent programme and morderating/facilitating the three-day event. According to the information received from the Framework Contractor, they have been working with the subcontractor in question on the organisation of several events for various directorates-general of the Commission in recent years. The standard rates charged by the subcontractor for those events were 2 500 euro and 900 euro for senior and junior consultants, respectively. In fact, the subcontractor applied a 10 % reduction in the case of INNOVEIT. The Framework Contractor, who cooperates with other moderators as well, assured the EIT that the rates charged are competitive in view of the market prices of such services. The price of 2 250 euro for a senior consultant is considered thus as a market rate reflecting both the high level of skills and competences needed to deliver the tasks requested and the type of work delivered which was mainly conceptual (and not logistical related to the conference organisation). Finally, it is important to note that the Memorandum of Understanding signed between DG EAC and EIT related to the procurement of this Framework Contract stipulates that the EIT could not take part in the interinstitutional call for tenders and then procure the same goods or services by other means. The EIT therefore had to use the Commission Framework Contract for the organisation of the INNOVEIT events. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/123 |
REPORT
on the annual accounts of the European Medicines Agency for the financial year 2015, together with the Agency’s reply
(2016/C 449/22)
INTRODUCTION
1. |
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. |
The Table presents key figures for the Agency (2). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
Other matter — event after balance sheet date
|
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 4 October 2016.
For the Court of Auditors
Klaus-Heiner LEHNE
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) More information on the Agency’s competences and activities is available on its website: www.ema.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
(9) The Agency’s accountant signed the accounts on 1 June 2016.
ANNEX
Follow-up of previous years’ comments
Year |
Court’s comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
The Agency’s fee regulation provides due dates for the collection of fees from applicants and the Agency’s related payments to National Competent Authorities (1). These due dates were not respected for most of the transactions audited by the Court. |
Ongoing |
2014 |
In 2014, the Agency carried out an administrative procedure against its Information, Communication and Technology (ICT) manager. Significant weaknesses in management control were reported, implying considerable operational and financial risks to the Agency. An action plan to address the issue was established and implemented. However, the effectiveness of the measures taken has yet to be evaluated by the Agency. |
Ongoing |
2014 |
One of the Agency’s tasks is to distribute appropriate pharmacovigilance information to Member States and to the general public. This information is collected from individual national authorities and verified with the pharmaceutical companies concerned. However, the Agency is largely dependent on controls and inspections carried out by Member States’ authorities. These determine the completeness and accuracy of information disseminated to the public. |
Ongoing |
2014 |
In 2014 the Agency concluded a 15 million euros framework contract (covering the years 2014 to 2017) for high-level management consultancy services. The objectives and activities to be carried out were not sufficiently specific to justify the procurement decision or the volume of the contract. There is no evidence that the Management Board had been consulted on the procurement decision, which would have been appropriate given the nature and value of the contract, even though the Financial Regulation does not require it. |
N/A |
(1) Agency’s fee regulation, Articles 10(1) and 11(1).
THE AGENCY’S REPLY
The Agency has taken note of the Court’s report.
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/128 |
REPORT
on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the financial year 2015, together with the Centre’s reply
(2016/C 449/23)
INTRODUCTION
1. |
The European Monitoring Centre for Drugs and Drug Addiction (hereinafter ‘the Centre’, aka ‘EMCDDA’), which is located in Lisbon, was created 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. |
The table presents key figures for the Centre (2). Table Key figures for the Centre
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON INTERNAL CONTROLS
12. |
In 2012 the Centre signed a framework contract with a maximum amount for signing specific contracts of 250 000 euro, which was specified in the contract notice. However, the Centre did not respect this ceiling. By the end of 2015 the total payments made under this contract amounted to 382 181 euro; i.e. exceeded it by 50 %. The payments made above the ceiling indicate that the Centre’s procedure for monitoring framework contracts should be improved. |
FOLLOW-UP OF PREVIOUS YEAR’S COMMENTS
13. |
An overview of the corrective actions taken in response to the Court’s comments from previous years is provided in the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
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) More information on the Centre’s competences and activities is available on its website: www.emcdda.europa.eu
(1) Budget figures are based on payment appropriations.
(2) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Centre.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
Carry-overs of committed appropriations were high for Title II (administrative expenditure) with 673 534 euro, i.e. 26 % (2013: 217 061 euro, i.e. 9 %). They mainly relate to an accelerated implementation of the multiannual ICT strategy, arising from resources initially planned for salary increases but not needed following a decision by the European Court of Justice. |
N/A |
THE CENTRE’S REPLY
12. |
In line with the relevant financial rules, the referred amount was mentioned as an estimate in the contract notice published for the purpose of the procurement at stake. The framework contract concluded pursuant to this process neither mentioned this amount nor did it refer to any maximum threshold. The EMCDDA has terminated this contract and launched a new procurement procedure for the concerned services. The Centre signed the contract in July 2016. Furthermore it has put in place a specific process to improve the central planning and monitoring of its procurements, including for framework contracts. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/133 |
REPORT
on the annual accounts of the European Maritime Safety Agency for the financial year 2015, together with the Agency’s reply
(2016/C 449/24)
INTRODUCTION
1. |
The European Maritime Safety Agency (hereinafter ‘the Agency’, aka ‘EMSA’), which is located in Lisbon, was set up by Regulation (EC) No 1406/2002 of the European Parliament and of the Council (1). The Agency's tasks are to ensure a high level of maritime safety and to prevent pollution by ships, provide the Commission and the Member States with technical assistance, and monitor the implementation of Union legislation, as well as to evaluate its effectiveness. |
2. |
The Table presents key figures for the Agency (2). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 4 October 2016.
For the Court of Auditors
Klaus-Heiner LEHNE
President
(2) More information on the Agency's competences and activities is available on its website: www.emsa.europa.eu.
(1) Budget figures are based on payment appropriations.
(2) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2012 |
Accounting procedures and information in respect of costs for internally generated intangible assets are not fully reliable. |
Completed |
THE AGENCY’S REPLY
The Agency has taken note of the Court’s report.
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/138 |
REPORT
on the annual accounts of the European Union Agency for Network and Information Security for the financial year 2015, together with the Agency’s reply
(2016/C 449/25)
INTRODUCTION
1. |
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. |
2. |
The table presents key figures for the Agency (4). Table Key figures for the agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
Carry-overs of committed appropriations are high for Title II (administrative expenditure) at 0,15 million euro, i.e. 22 % (2014: 0,6 million euro, i.e. 49 %). These carry-overs relate to investments in IT infrastructure that was ordered as planned near the end of the year. |
OTHER COMMENTS
13. |
In 2016 the Agency plans to relocate some administrative staff from Heraklion to Athens while its basic Regulation provides that staff primarily engaged in the administration of the Agency should be based in Heraklion. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) The Agency’s operational staff was relocated to Athens in March 2013.
(3) OJ L 165, 18.6.2013, p. 41.
(4) More information on the Agency’s competences and activities is available on its website: www.enisa.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(5) These include the balance sheet and the statement of financial performance, 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 39 and 50 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).
(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 107 of Delegated Regulation (EU) No 1271/2013.
(10) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2012 |
Whereas the Financial Regulation and the corresponding Implementing Rules provide for a physical inventory of fixed assets at least every 3 years, the Agency has not carried out a comprehensive physical inventory since 2009. |
Completed |
2014 |
The overall level of committed appropriations was high at 100 % (94 % in 2013). In total, committed appropriations carried over to 2015 amount to 1,3 million euro, i.e. 15 % of total appropriations (2013: 1,2 million euro, i.e. 13,5 %). Commitment appropriations carried over are high for Title II (administrative expenditure) at 0,6 million euro, i.e. 49 % (2013: 0,8 million euro, i.e. 59 %). These were linked to investments in IT infrastructure ordered as planned near the year-end for the Agency’s two offices. |
N/A |
THE AGENCY’S REPLY
12. |
ENISA notes the decrease of the rate of appropriations carried over to the next year from 15 % in 2014 to 7 % in 2015, due to continuous performance improvement of ENISA in this area. The carry-over is justified and related to the building project (0,05 million euro) for the removal of the landlord data centre of Athens office (1) that was only finalised in December 2015. Moreover, the procurement of 26 laptops (0,05 million euro), which reached the end of their warranty period, was finalised in December 2015, following a negotiated procurement procedure. |
13. |
According to recital 7 of the preamble of ENISA Regulation (EC) No 526/2013, ‘staff primarily engaged in the administration of the Agency […] should be based in Heraklion’. However the text in the preamble is not considered to be a restrictive factor (2). |
(1) The move of the data centre of the landlord was dictated by the committee of the Council’s Security Directorate which Identified risks and suggested immediate removal of a third party’s data centre from within ENISA premises.
(2) According to settled case law of the Court of Justice of the EU. The preamble of an EU text has no binding legal force Case C-162/97. Nilsson and others. ECLI:EU:1998:554, paragraph 54.
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/143 |
REPORT
on the annual accounts of the Europol Pension Fund for the financial year 2015, together with the Fund’s reply
(2016/C 449/26)
INTRODUCTION
1. |
The Europol Pension Fund (hereinafter ‘the Fund’, aka ‘EPF’), which is located in The Hague, was established by Article 37, Appendix 6, to the former Staff Regulations of the European Police Office, The Hague (Europol). Rules on the implementation of the Fund were established by Council Act of 12 March 1999 (1) and amended by Council Decision 2011/400/EU (2). The objective of the Fund was to finance and pay pensions for staff already employed by Europol before it became a European Agency on 1 January 2010. It has been dissolved as of 1 January 2016 (see paragraph 11). |
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
2. |
The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of the Fund’s internal controls. This is supplemented by evidence provided by the work of other auditors and an analysis of management representations. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
10. |
The comments which follow do not call the Court’s opinions into question. |
OTHER COMMENTS
11. |
The Court in its Specific Annual Report for the financial year 2014 reported that the Fund’s Board and Europol’s Management Board together with the Council were assessing options for the future of the Fund. On 8 October 2015 the Council decided to dissolve the Fund as of 1 January 2016. The assets of the Fund have been liquidated and the residual activity of the Fund has, as of 1 January 2016, been transferred to Europol which will be responsible for executing the payments of benefits to a very limited population of pensioners and former staff members (7). The Court will report separately on the Fund’s closing report showing its assets and liability situation (8). |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) Document 5397/99 on the Council’s public register: http://register.consilium.europa.eu/
(3) The accounts comprise the balance sheet, the statement of income and expenses, the cash-flow statement and the explanatory notes.
(4) Articles 33 and 43 of Commission Regulation (EC, Euratom) No 2343/2002 (OJ L 357, 31.12.2002, p. 72).
(5) In accordance with Council Act of 12 March 1999 adopting rules on the EPF and Council Decision of 28 June 2011 amending the latter, the accounts are prepared on the basis of The Netherlands accounting rules on Pension Funds, namely Directive 610 of the Dutch financial reporting rules, and on the international Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.
(6) Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (OJ L 248, 16.9.2002, p. 1).
(7) Articles 1, 2 and 3 of Council Decision (EU) 2015/1889 of 8 October 2015 on the dissolution of the Europol Pension Fund (OJ L 276, 21.10.2015, p. 60).
(8) Article 3(3) of Decision (EU) 2015/1889.
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
Emphasis of Matter The Court draws attention to Notes 2.6 and 2.7 to the Fund’s Annual Report 2014. The Fund’s Management Board prepared the accounts on a going concern basis. However, it is expected that 2015 will lead to a further settlement of most of the currently still unpaid pension rights via a transfer to another pension scheme and that by 31 December 2015 there will be no active participants. The Fund’s Board and Europol’s Management Board together with the Council are currently assessing options for the future of the Fund, one of which is liquidation shortly after 31 December 2015. |
Completed |
THE FUND’S REPLY
The Fund has taken note of the Court’s report on the annual accounts.
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/148 |
REPORT
on the closing report pursuant to Council Decision (EU) 2015/1889 on the dissolution of the Europol Pension Fund as of 1 January 2016, together with the Fund’s and Europol’s reply
(2016/C 449/27)
INTRODUCTION
1. |
The Europol Pension Fund (hereinafter ‘the Fund’, aka ‘EPF’), was established by Article 37, Appendix 6, of the former Staff Regulations of the European Police Office (‘Europol’). Rules on the implementation of the Fund were approved by Council Act of 12 March 1999 (1) and amended by Council Decision 2011/400/EU (2). The objective of the Fund was to finance and pay pensions for staff already employed by Europol before it became a European Agency on 1 January 2010. On 8 October 2015, the Council decided to dissolve the Fund as of 1 January 2016 and to transfer the residual activities to Europol (3). The management board of the Fund has prepared a report showing the Fund’s closing asset and liability situation (‘closing report’) (4). |
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
2. |
The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of the Fund’s internal controls. This is supplemented by evidence provided by the work of other auditors (5) and an analysis of management representations. |
INDEPENDENT AUDITOR’S REPORT
The management board’s responsibility
The auditor’s responsibility
Court’s Opinion
|
9. |
The comments which follow do not call the Court’s opinion into question. |
OTHER COMMENTS
10. |
The annexes to the closing report contain the amounts to be forwarded to Europol and those to be refunded to the Member States, the general budget of the European Union as well as the former active participants and their lawful heirs respectively (9). The annexes were audited by an independent external audit company. It concluded in its assurance report that they were prepared, in all material aspects, in accordance with the Council Decision. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) Document 5397/99 on the Council’s public register: http://register.consilium.europa.eu/
(3) Council Decision (EU) 2015/1889 of 8 October 2015 on the dissolution of the Europol Pension Fund (OJ L 276, 21.10.2015, p. 60).
(4) Article 3 of Council Decision (EU) 2015/1889.
(5) The closing report was audited by an independent external audit company.
(6) See footnote 4.
(7) In accordance with Council Act of 12 March 1999 adopting rules on the EPF and Council Decision of 28 June 2011 amending the latter, the accounts are prepared on the basis of The Netherlands accounting rules on Pension Funds, namely Directive 610 of the Dutch financial reporting rules, and on the international Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.
(8) See footnote 4.
(9) Article 4 of Council Decision (EU) 2015/1889.
THE FUND’S AND EUROPOL’S REPLY
The Fund and Europol have taken note of the Court’s report regarding the closing report of the Fund.
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/151 |
REPORT
on the annual accounts of the European Railway Agency for the financial year 2015, together with the Agency’s reply
(2016/C 449/28)
INTRODUCTION
1. |
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. |
The Table presents key figures for the Agency (2). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 220, 21.6.2004, p. 3.
(2) More information on the Agency’s competences and activities is available on its website: www.era.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
||||||
2013 |
According to the Agency’s founding regulation (1), staff shall consist of:
|
Ongoing |
||||||
At the end of 2013, 136 temporary employees were working for the Agency. The founding regulation also stipulates that during the first ten 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. |
||||||||
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. |
||||||||
2013 |
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. |
Ongoing |
||||||
2014 |
The overall level of committed appropriations was high at 97 %. However, there was also a high level of committed appropriations carried over for the operational budget (title III) at 2,2 million euros, i.e. 37,7 % (2013: 1,6 million euros, i.e. 25 %) due to delayed operational projects (safety, European Railways Traffic Management System — ERTMS) and delayed IT projects. This situation is at odds with the budgetary principle of annuality. |
N/A |
||||||
2014 |
When implementing a multiple framework contract on ERTMS project follow-up, the Agency reopened a competition procedure for the award of a specific contract. However, both the excessive weighting of quality and the high maximum contract value in the reopening tender resulted in financial offers close to the maximum contract value. This is in contradiction with the objective of reopening a competition procedure, which is to ensure competition on price. |
N/A |
(1) Article 24(3) of Regulation (EC) No 881/2004 of the European Parliament and of the Council (OJ L 220, 21.6.2004, p. 3).
THE AGENCY’S REPLY
The Agency has taken note of the Court’s report.
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/157 |
REPORT
on the annual accounts of the European Research Council Executive Agency for the financial year 2015, together with the Agency’s reply
(2016/C 449/29)
INTRODUCTION
1. |
The European Research Council Executive Agency (hereinafter ‘the Agency’, aka ‘ERCEA’), which is located in Brussels, was created by Commission Decision 2008/37/EC (1). The Agency was established for a period beginning on 1 January 2008 and ending on 31 December 2017 with the aim of managing the ‘Ideas’ specific programme under the 7th Framework Programme for Research. |
2. |
The table presents key figures for the Agency (2). Table Key figures for the agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
Carry-overs of committed appropriations for Title III (operational expenditure) were high at 1 457 920 euro, i.e. 43,14 % (2014: 1 126 275 euro, i.e. 38,50 %). They mainly relate to the multi-annual nature of IT contracts (504 473 euro) and the ex post audits of grant schemes (687 522,50 euro) that were initiated in 2015 but had not been concluded by the 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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(2) More information on the Agency’s competences and activities is available on its website: www.erc.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(3) These include the balance sheet and the statement of financial performance, 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 38 to 42 of the Financial Regulation of the Agency.
(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) Articles 87 to 92 of the Financial Regulation of the Agency
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
Procedures with regard to tangible and intangible assets need to be further strengthened in order to ensure their proper safeguarding and the preparation of timely, accurate and complete information in this area. The Assets Register needs to be kept up-to-date in respect of the location of its assets, inventory procedures need to be formalised and the Agency’s guidelines on the capitalisation of internally developed intangible assets need to include sufficient detail to ensure it uses a consistent approach. |
Completed |
THE AGENCY’S REPLY
12. |
‘The Agency has taken note of the Court’s report and considers that the comment regarding the “carry-overs of committed appropriations for Title III” does not give rise to corrective actions, as they are justified based on their nature.’ |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/162 |
REPORT
on the annual accounts of the European Securities and Markets Authority for the financial year 2015, together with the Authority’s reply
(2016/C 449/30)
INTRODUCTION
1. |
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. |
The Table presents key figures for the Authority (2). Table Key figures for the Authority
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
3. |
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 and an analysis of management representations. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
The level of committed appropriations carried over was high for Title II (administrative expenditure) at 2,2 million euro, i.e. 26 % (2014: 1,4 million euro, i.e. 19 %). These carry-overs mainly relate to IT projects for which services had not yet been delivered or invoices will only be received in 2016. |
13. |
The level of committed appropriations carried over was also high for Title III (operational expenditure) at 2,3 million euro, i.e. 33 % (2014: 4,1 million euro, i.e. 45 %). These carry-overs mainly relate to IT projects for which services had not yet been delivered or invoices will only be received in 2016 (1,7 million euro) as well as mission expenses that will only be reimbursed in 2016 (0,1 million euro). |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 331, 15.12.2010, p. 84.
(2) More information on the Authority’s competences and activities is available on its website: www.esma.europa.eu
(1) Budget figures are based on payment appropriations.
(2) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Authority.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court’s comment |
Status of corrective action (Completed/Ongoing/Outstanding/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, the full amount was then recorded in the accounts as a liability towards the European Commission. |
Completed |
2011 |
Weaknesses were noted as regards six legal commitments made in advance of budget commitments (483 845 euro). |
Ongoing (1) |
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 |
2013 |
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. |
Completed |
2014 |
The amount of fees charged to supervised entities (Credit Rating Agencies and Trade Repositories) in 2014 (6 623 000 euro) appearing as revenue in the final statement of financial performance was based on estimated rather than actual costs of supervisory activities carried out . Fees levied on supervised entities should be as close as possible to the actual cost incurred in this area. An Activity Based Cost modelling exercise is currently being carried out by ESMA in order to achieve this. |
Ongoing (2) |
2014 |
When ESMA was established in 2010 it inherited a number of IT framework contracts from its predecessor body CESR (Committee of European Securities Regulators) for the hosting of its data centres as well as the development and maintenance of its IT systems. Failure to replace these framework contracts with timely calls for tender led to a situation where two of them were extended beyond their original duration. It also resulted in the Authority procuring some IT services using a French central purchasing body (Union de Groupements d’Achats Publics — UGAP). The Authority also made use of UGAP to buy furniture and stationery during the year. Total payments in 2014 amounted to 956 000 euro. The Court informed the Authority that the use of UGAP was not in compliance with the Financial Regulation and it has since ceased to do so. The Authority has now also replaced all CESR IT framework contracts with its own. |
Completed |
2014 |
The total cancellation rate for appropriations carried over from 2013 was high at 19 % i.e. 940 054 euro. This mainly stems from delays on the part of contractors in delivering requested services, but also the cancelled purchase of licenses for a cancelled project, difficulties encountered in implementing a contract for interim staff and in making the changeover from the previous to the new IT consultancy framework contract. |
N/A |
2014 |
The overall level of committed appropriations increased from 93 % in 2013 to 99 % in 2014, indicating that commitments were made in a more timely manner. However, the level of committed appropriations carried over to 2015 was high for title III (operational expenditure) at 4 063 580 euro, i.e. 45 % (2013: 3 688 487 euro, i.e. 58 %). Of this amount approximately 2 million euro relate to IT and other services provided in 2014 that had not been paid for by the Authority by the year-end. Another 1,3 million euro worth of contracts had been contracted towards the year-end and related services were expected to be delivered in 2015. The remaining amount of carry-overs is explained by the multi-annual nature of the contacts signed. |
N/A |
(1) In 2015 the ex-post commitments amounted to 165 000 euro.
(2) The Authority needs to put in place a methodology in this area.
THE AUTHORITY’S REPLY
13. |
ESMA acknowledges the reported level of committed appropriations carried over in Title II and Title III. The comment of the Court is noted and the explanation related to the multi-annual nature of the ESMA’s large EU IT projects is confirmed. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/168 |
REPORT
on the annual accounts of the European Training Foundation for the financial year 2015, together with the Foundation’s reply
(2016/C 449/31)
INTRODUCTION
1. |
The European Training Foundation (hereinafter ‘the Foundation’, aka ‘ETF’), which is located in Turin, was established by Council Regulation (EEC) No 1360/90 (1) (recast (EC) No 1339/2008). The Foundation’s task is to support the reform of vocational training in the European Union’s partner countries. To do this, it assists the Commission in the implementation of various programmes (e.g. IPA, FRAME, GEMM). |
2. |
The table presents key figures for the Foundation (2). Table Key figures for the Foundation
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
3. |
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 and an analysis of management representations. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 131, 23.5.1990, p. 1.
(2) More information on the Foundation’s competences and activities is available on its website: www.etf.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Foundation.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2013 |
At the end of 2013, the Foundation had 7,5 million euro in accounts at a single bank with a low credit rating (F3, BBB) (1). |
Ongoing |
2014 |
Cancellations of appropriations carried over from 2013 were high for Title I (15,9 %) and Title II (7,6 %) which indicates an over-estimation of financial needs. |
N/A |
2014 |
The overall level of committed appropriations was high at 99,9 %. The level of committed appropriations carried over to 2015 was high for Title II (administrative expenditure) at 0,75 million euro, i.e. 36,2 % (2013: 0,55 million euro, i.e. 30 %). The main reason was planned purchases made at the end of 2014 for the renewal of office furniture (0,37 million euro), software (0,14 million euro) and hardware (0,1 million euro). |
N/A |
2014 |
In 2005 new EU Staff Regulations entered into force, including provisions that future remunerations of officials recruited before 1 May 2004 should not be less than under the previous EU Staff Regulations. The Court’s audit revealed that this was not complied with and, in the case of two of the 96 temporary agents employed at that time, this led to a total underpayment of 14 745 euro (salary cost for ETF) for the period 2005 to 2014. The Foundation has made the supplementary salary payments in June 2015. |
Completed |
(1) Amount reduced to 1,8 million euro.
THE FOUNDATION’S REPLY
The Foundation has taken note of the Court’s report.
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/173 |
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 2015, together with the Agency’s reply
(2016/C 449/32)
INTRODUCTION
1. |
The European Agency for the operational management of large-scale IT systems in the area of freedom, security and justice (eu-LISA), hereinafter ‘the Agency’, which is located in Tallinn, Strasbourg and St. Johann im Pongau, was established by Regulation (EC) No 1077/2011 of the European Parliament and of the Council (1). The core mission of this Agency is to fulfil the operational management tasks for the Second Generation Schengen Information System (SIS II), the Visa Information System (VIS) and Eurodac. |
2. |
The Table presents key figures for the Agency (2). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON THE LEGALITY AND REGULARITY OF TRANSACTIONS
12. |
The Agency signed a 2 million euros framework contract for the procurement services by a contractor (procurement services), for training, coaching and learning services from third party providers (training services). The contractor identifies suitable training services for any specific request, and provides a quote for the training services plus a fee for its own procurement service (uplift). However, the framework contract fails to specify that the procurement services should be in compliance with the procurement provisions in the Agency’s financial rules. Therefore the current process of submitting quotes for approval by the Agency does not ensure that the services are procured in compliance with all requirements of the financial rules. |
13. |
The call for expression of interest and pre-selection of candidates for participation in a negotiated procedure with an estimated value of 20 million euros took place without a delegation by the authorising officer. |
COMMENTS ON BUDGETARY MANAGEMENT
14. |
The committed appropriations carried over under budget title II (administrative expenditure) amount to 9 million euros or 50 % of total committed appropriations (2014: 15 million euros; i.e. 87 %). These carry overs mainly concern a large contract for the extension of the Strasbourg building (4,6 million euros) as well as services provided under multi-annual contracts. |
15. |
Arrangements with Schengen Associated Countries (Switzerland, Liechtenstein, Iceland and Norway) defining detailed rules for their participation in the work of the Agency, including provisions on voting rights and their contribution to the Agency’s budget, have still not been concluded. In their absence, Schengen Associated Countries contribute to Title III (operational expenditure) of the Agency’s budget following a provision in the association agreements signed with the EU. However they do not yet contribute to activities under titles I and II (salaries and other administrative expenditure) of the Agency’s budget. |
OTHER COMMENTS
16. |
The audited procurement procedures showed that the Agency engaged in contractual agreements or negotiations with a single contractor without precisely defining the services requested. This limits competition and increases dependence upon the contractor. The Agency should conclude agreements with multiple suppliers or define the services required more precisely, whenever possible. |
FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS
17. |
An overview of the corrective actions taken in response to the Court’s comments from previous years is provided in the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 286, 1.11.2011, p. 1.
(2) More information on the Agency’s competences and activities is available on its website: www.eulisa.europa.eu
(1) Budget figures are based on payment appropriations.
(2) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court’s comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2013 |
There is no insurance coverage for fixed tangible assets, except for multi-risk fire for the premises in Tallinn. |
Completed |
2013 |
According to the Agency’s Founding Regulation, countries associated with the implementation, application and development of the Schengen acquis and Eurodac-related measures must make a contribution to the Agency’s budget. Although Schengen associated countries were using the systems managed by the Agency in 2013 the Commission’s negotiations were still ongoing. |
Ongoing (1) |
2014 |
Emphasis of matter in relation to the reliability of the accounts Without calling into question the opinion expressed in paragraph 8, the Court 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 is the Agency’s core task. 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 (approximately 6,6 million euros at date of transfer and 2,1 million euros at 31 December 2014) (2). These values relate mainly to hardware and off-the-shelf software components and do not include software development costs (see note 6.3.1 to the annual accounts of the Agency). |
Ongoing |
2014 |
Out of the 6,6 million euros committed appropriations for titles I (staff expenditure) and II (administrative expenditure) which were carried over from 2013 to 2014, 1,7 million euros (26 %) were cancelled in 2014, showing that budgetary needs were overestimated at the end of 2013. |
N/A |
2014 |
Committed appropriations carried over to 2015 were very high for title II (administrative expenditure) at 15 million euros, i.e. 87 % (2013: 6 million euros or 79 %). These carry-overs mainly resulted from delayed procurements for the extension and refurbishment of the Agency’s site in Strasbourg. Carry-overs of committed appropriations were also high for title III (operational expenditure) at 24,5 million euros (85 %) (2013: no comparative figures available), mainly in relation to multi-annual contracts for the maintenance of the IT systems. The high levels of cancelled carry-overs from 2013 and the extent of carry-overs made from 2014 to 2015 is at odds with the budgetary principle of annuality. Reliable procedures for budget planning, execution and monitoring need to be put in place. |
N/A |
(1) For further information see paragraph 15 and the Agency’s reply.
(2) 0,2 million euros at 31 December 2015 which is under the materiality threshold.
THE AGENCY’S REPLY
14. |
The framework contract in question was awarded through an open procedure under the rules of the Agency’s Financial Regulation. While there was no explicit provision that the contractor would be bound to EU procurement rules, the specifications include a mandatory requirement that the lowest price on the market would be provided. The Agency has the right to impose a price review if a lower price can be found. The Agency is not aware of a legal obligation to impose a specific set of procurement rules on contractors. |
15. |
The Agency is of the opinion that no pre-selection, under the meaning of the Financial Regulation and its Rules of Application (i.e. formal application of pre-set selection criteria), took place before the launch of the negotiated procedure. The call for expressions of interest was used as part of the market prospection and not as a tender procedure. The outcome of the market prospection was part of the documents approved by the Authorising Officer before the launch of the tender. |
16. |
As the Court mentioned in the case of the carry-forward of the appropriations for the Strasbourg reconstruction project, the payment schedule was known to require substantial carry-forwards of C1 and C2 appropriations, and these operations were planned and authorised by the Management Board. The Agency deployed a considerable effort in planning and coordination to verify that all business cases for the carry-forward of non-differentiated appropriations were indeed justified, as evidenced by the sharp decrease of cancellations, from EUR 1 690 194,29 representing 25,53 % of carried over appropriations in 2014 to EUR 457 590,48 representing 8,75 % in 2015. |
17. |
The Agency acknowledges the comment and points out that all legally possible actions have been taken in order to acquire financial contributions of Associated Countries to the Agency’s budget, whereas negotiations with Associated Countries are led by the European Commission rather than the Agency. Agreements are subject of ratification by the national parliaments of these countries. |
18. |
The Agency specifies technical requirements at the best of its knowledge at the time when competitive tenders are launched, or when negotiations with a current contractor are unavoidable. Especially for the systems under management, factors outside the control of the Agency limit the possibility to systematically re-open competitions. These factors include: the evolving technical and legal requirements of the systems compared with the launch of the tender; the limited amount of workforce to perform tenders; the limited time to contract requirements imposed by operational activities. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/179 |
REPORT
on the annual accounts of the European Agency for Safety and Health at Work for the financial year 2015, together with the Agency’s reply
(2016/C 449/33)
INTRODUCTION
1. |
The European Agency for Safety and Health at Work (hereinafter ‘the Agency’, aka ‘EU-OSHA’), which is located in Bilbao, was created by Council Regulation (EC) No 2062/94 (1). The Agency's task is to collect and disseminate information on national and Union priorities in the field of health and safety at work, to support national and Union organisations involved in policymaking and implementation and provide information on preventive measures. |
2. |
The table presents key figures for the Agency (2). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
The level of committed appropriations carried over for Title II (administrative expenditure) remains high at 364 740 euro, i.e. 26 % (2014: 443 412 euro, i.e. 34 %). These carry-overs mainly concern services that are contracted for a period covering two calendar years, as well as IT services which had not yet been fully delivered or been invoiced by the end of 2015. |
13. |
The level of committed appropriations carried over for Title III (operational expenditure) remains high at 3 383 052 euro, i.e. 41 % (2014: 4 277 160 euro, i.e. 42 %). These carry-overs mainly concern large-scale research projects with durations of more than one year, as well as a board meeting held in January 2016 which had to be organised in the last quarter of 2015. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 216, 20.8.1994, p. 1. The Regulation was last amended by Regulation (EC) No 1112/2005 (OJ L 184, 15.7.2005, p. 5).
(2) More information on the Agency's competences and activities is available on its website: www.osha.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(3) These include the balance sheet and the statement of financial performance, the cash flow table, the statement of changes in net assets and a summary of the significant accounting policies and other explanatory notes.
(4) These comprise the budgetary outturn account and the annex to the budgetary outturn account.
(5) Articles 39 and 50 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).
(6) The accounting rules adopted by the Commission’s accounting officer are derived from the International Public Sector Accounting Standards (IPSAS) issued by the International Federation of Accountants or, where relevant, the International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.
(7) Article 107 of Regulation (EU) No 1271/2013.
(8) Delegated Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
The overall level of committed appropriations was 99 % as in 2013. However, the level of committed appropriations carried over to 2015 for Title II (administrative expenditure) was high at 443 412 euro, i.e. 34 % (2013: 601 426 euro, i.e. 30 %). |
These mainly relate to the purchase of goods and services, as planned, at the end of the year in connection with the Agency’s fitting out of its new premises, with the renewal of annual IT contracts and the cost of audit services N/A |
2014 |
In 2005, new EU Staff Regulations entered into force, including provisions that future remunerations of officials recruited before 1 May 2004 should not be less than under the previous EU Staff Regulations. The Court’s audit revealed that this was not complied with and, in the case of one of the 26 officials employed at that time, this led to an underpayment of 5 300 euro for the period 2005 to 2014. The Agency will make the supplementary salary payments in due course. |
Completed |
THE AGENCY’S REPLY
The Agency has taken note of the Court’s report.
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/184 |
REPORT
on the annual accounts of the Euratom Supply Agency for the financial year 2015, together with the Agency’s reply
(2016/C 449/34)
INTRODUCTION
1. |
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. |
2. |
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. As from 2012, the Agency was granted its own budget by the Commission, which however only covers a minor part of its expenditure. |
3. |
The Table presents key figures for the Agency (3). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
4. |
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
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
12. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
13. |
The level of carryovers of committed appropriations is high for title II with 41 482 euros, i.e. 50,5 % (2014: 8 970 euros, i.e. 14,9 %). They mainly relate to the purchase of IT hardware (servers and laptops) ordered in December 2015 and to IT consulting services which go beyond the calendar year. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
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.
(3) More information on the Agency’s competences and activities is available on its website: http://ec.europa.eu/euratom/index.html
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(4) These include the balance sheet and the statement of financial performance, 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 Delegated Regulation (EU) No 1271/2013.
THE AGENCY’S REPLY
13. |
The commitments were executed in the 4th quarter of 2015 because the decision on the possibility to use, or not, the DIGIT framework contracts was delayed and so were the solution design and the negotiation procedure. As a consequence, deliveries and payments went beyond 2015. The Agency will respect the principle of annuality to the maximum extent possible in the future. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/188 |
REPORT
on the annual accounts of the European Foundation for the Improvement of Living and Working Conditions for the financial year 2015, together with the Foundation’s reply
(2016/C 449/35)
INTRODUCTION
1. |
The European Foundation for the Improvement of Living and Working Conditions (hereinafter ‘the Foundation’, aka ‘Eurofound’), which is located in Dublin, was established by Council Regulation (EEC) No 1365/75 (1). The Foundation’s task is to contribute to the planning and establishment of better living and working conditions in the Union by increasing and disseminating knowledge which is relevant to this subject. |
2. |
The table presents key figures for the Foundation (2). Table Key figures for the Foundation
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
3. |
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 and an analysis of management representations. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
The level of committed appropriations carried over to 2016 was high for Title III (operational expenditure) at 2 135 164 euro, i.e. 31,2 % (2014: 3 814 156 euro, i.e. 53,7 %), mainly in relation to multiannual projects implemented according to schedule. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 139, 30.5.1975, p. 1.
(2) More information on the Foundation’s competences and activities is available on its website: www.eurofound.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Foundation.
(3) These include the balance sheet and statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2013 |
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. |
Completed |
2014 |
In 2014, the overall level of committed appropriations was high at 99,7 %, indicating that commitments were made in a timely manner. However, the level of committed appropriations carried over to 2015 was high for Title III (operational expenditure) at 3 814 156 euro, i.e. 53,7 % (2013: 3 375 781 euro, i.e. 48,6 %), mainly in relation to multiannual projects, for which activities were implemented and payments were made according to schedule, and in relation to one multiannual project for which implementation was brought forward to 2014 but where payments are only due in 2015. |
N/A |
2014 |
In 2005 new EU Staff Regulations entered into force, including provisions that future remunerations of officials recruited before 5 August 2005 should not be less than under the previous EU Staff Regulations. The Court’s audit revealed that this was not complied with and, in the case of 20 of the 75 officials employed at that time, this led to a total underpayment of 128 735 euro for the period 2005 to 2014. The Foundation’s accounts include a provision for this amount. |
Completed |
THE FOUNDATION’S REPLY
13. |
Eurofound acknowledges the observation of the Court. We welcome the analysis on the reasons for the carry-overs due mainly to multiannual projects implemented according to schedule. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/193 |
REPORT
on the annual accounts of the European Union’s Judicial Cooperation Unit for the financial year 2015, together with Eurojust’s reply
(2016/C 449/36)
INTRODUCTION
1. |
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. |
The table presents key figures for Eurojust (2). Table Key figures for Eurojust
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
3. |
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 and an analysis of management representations. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
The level of committed appropriations carried over is high for Title II (administrative expenditure) at 1,6 million euro, i.e. 21 % (2014: 1,5 million euro or 20 %). These carry-overs are mainly related to specific contracts for security and hospitality services (0,3 million euro) and for ICT projects, hardware and maintenance (0,6 million euro) as well as consultancy and project costs for the new premises (0,3 million euro), whereby 0,5 million euro were committed late in the year, mostly for services to be provided in 2016. |
FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS
13. |
An overview of the corrective actions taken in response to the Court’s comments from the previous years is provided in the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(2) More information on Eurojust’s competences and activities is available on its website: www.eurojust.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by Eurojust.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
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. No corrective measures were taken in 2011 (1). |
Ongoing |
2014 |
The financial impact of salary adjustments and of the increase in the correction coefficient of the previous and the current years, both decided by the budgetary authorities in April 2014, were not included in the initial budget for the year 2014. The shortfall in salary budget of some 1,8 million euro (2) required temporary cutbacks on operational expenditure, mainly for data processing and information management projects, as well as substantial transfers from administrative and operating budget lines at the year-end. At the end of November 2014, the shortfall was partly balanced by an amended budget providing additional 1,2 million euro (3) to the agency and commitments were made to catch up with the implementation of the projects. |
Ongoing |
2014 |
The overall level of committed appropriations was high at 99 %. However, for Title III (operating expenditure) the level of committed appropriations carried over to 2015 was high at 2,6 million euro, i.e. 35 % (2013: 2,3 million euro, i.e. 32 %). This mainly resulted from the temporary budget shortfall during the year where commitments could only be made late in the year (see paragraph 11) and from granting projects for ‘Joint Investigation Teams’ launched during the last months of 2014 for which payments were not due until 2015. |
N/A |
(1) The new Eurojust Regulation is still under consideration by the legislator.
(2) 2015: 1,7 million euro.
(3) September 2015: 0,8 million euro.
EUROJUST’S REPLY
13. |
Eurojust accepts the fact that carry-overs to 2016 for Title II are relatively high, however refers to the explanations provided by the Court. Eurojust remains vigilant to avoid any unjustified carry-overs, which are not the direct result of the ongoing security requirements and operational expenses. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/198 |
REPORT
on the annual accounts of the European Police Office for the financial year 2015, together with the Office’s reply
(2016/C 449/37)
INTRODUCTION
1. |
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. |
The Table presents key figures for the Office (2). Table Key figures for the Office
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
Carry-overs of committed appropriations are high for Title II (administrative expenditure) at 4,2 million euro, i.e. 41 % (2014: 1,9 million euro, i.e. 27 %). They mainly concern building related works, such as functional and technical improvements of the operational rooms at the Office headquarters (1,5 million euro) or preventive/corrective maintenance and additional works (0,8 million euro). These works were still ongoing or invoices had not been received by the end of 2015. |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 121, 15.5.2009, p. 37.
(2) More information on the Office’s competences and activities is available on its website: www.europol.europa.eu.
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Office.
(3) These include the balance sheet and the statement of financial performance, 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 budgetary outturn account and the annex to the budgetary outturn account.
(5) Articles 39 and 50 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).
(6) The accounting rules adopted by the Commission’s accounting officer are derived from the International Public Sector Accounting Standards (IPSAS) issued by the International Federation of Accountants or, where relevant, the International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.
(7) Article 107 of Regulation (EU) No 1271/2013.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2011 |
Exceptions and deviations were recorded for 7 % of 2011 payments. |
Ongoing |
2013 |
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. |
Completed |
2014 |
Budget implementation rates improved significantly in 2014 and total carry-overs of committed appropriations decreased to 5,7 million euro, i.e. 6,7 % (2013: 11,6 %; 2012: 19,6 %). Carry-overs of committed appropriations were still relatively high for title II (administrative expenditure) at 1,9 million euro, i.e. 27 % (2013: 3,0 million euro, i.e. 41 %). They mainly related to maintenance and to modifications to Europol's headquarters opened in 2011 (1,1 million euro). |
N/A |
2014 |
The cancellation rate of committed appropriations carried over from the previous year was high at 22 % (2013: 9 %). Cancellations were mainly related to delays in IT projects provided by external suppliers (mainly in the area of document and asset management and the exchange of police data). |
N/A |
THE OFFICE’S REPLY
12. |
Europol takes note of the ECA’s comment and will continue its efforts to ensure efficient and compliant budget implementation, especially concerning carry-forwards in relation to administrative expenditure. The changes to the building were necessary in light of Europol’s expanding tasks, in particular in the area of counter terrorism. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/203 |
REPORT
on the annual accounts of the European Union Agency for Fundamental Rights for the financial year 2015, together with the Agency’s reply
(2016/C 449/38)
INTRODUCTION
1. |
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. |
The Table presents key figures for the Agency (2). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
The level of carry-overs of committed appropriations remained high for Title III at 5 723 282 euro, i.e.70 % (2014: 5 848 956 euro, i.e. 75 %). This results mainly from the nature of activities of the Agency which involve procuring studies that span over many months, often beyond 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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(2) More information on the Agency’s competences and activities is available on its website: www.fra.europa.eu.
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(3) These include the balance sheet and the statement of financial performance, the cash flow table, the statement of changes in net assets and a summary of the significant accounting policies and other explanatory notes.
(4) These comprise the budgetary outturn account and the annex to the budgetary outturn account.
(5) Articles 39 and 50 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).
(6) The accounting rules adopted by the Commission’s accounting officer are derived from the International Public Sector Accounting Standards (IPSAS) issued by the International Federation of Accountants or, where relevant, the International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.
(7) Article 107 of Regulation (EU) No 1271/2013.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
2014 budget appropriations were fully committed. However, the level of committed appropriations carried over to 2015 was high for Title II (administrative expenditure) at 551 466 euro, i.e. 25 % (2013: 579 429 euro, i.e. 27 %) and for Title III (operating expenditure) at 5 848 956 euro, i.e. 75 % (2013: 5 625 444 euro, i.e. 69 %). |
N/A |
2014 |
The amounts carried over under title II mainly relate to the planned purchase of IT goods and services for which payments were only due in 2015. 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. |
N/A |
2014 |
In 2005 new EU Staff Regulations entered into force, including provisions that future remuneration of officials recruited before 1 May 2004 should not be less than under the previous EU Staff Regulations. The Court’s audit revealed that this was not complied with and, in the case of 10 of the 26 officials employed at that time, this led to a total underpayment of 45 892 euro for the period 2005 to 2014. The Agency will make the supplementary salary payments in due course. |
Completed |
THE AGENCY’S REPLY
13. |
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 last few years has been in excess of 99 %. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/208 |
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 2015, together with the Agency’s reply
(2016/C 449/39)
INTRODUCTION
1. |
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. |
The table presents key figures for the Agency (2). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Basis for qualified opinion on the reliability of the accounts
Qualified opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
12. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON THE LEGALITY AND REGULARITY OF TRANSACTIONS
13. |
The ex post audit to Iceland carried out by the Agency in October 2015 detected irregular payments totalling 1,4 million euro related to the depreciation of a vessel participating in seven joint operations from 2011 to 2015. The Icelandic coastguard had claimed reimbursement of depreciation for that vessel even though it had exceeded the useful life provided for in the Agency’s guidelines. Whilst the Agency has the right to recover irregular payments made in the last 5 years, it announced the recovery of only the payments made since January 2015, amounting to 0,6 million euro. |
14. |
The Internal Security Fund (ISF) is set up for the period 2014-2020. It is composed of two instruments, ISF Borders and Visa as well as ISF Police, under which 2,8 billion euro and 1 billion euro are available for funding actions respectively. The Commission, under ISF Borders and Visa, reimburses Member States’ purchases of means, such as vehicles or vessels as well as running costs such as fuel consumption or maintenance. The Agency also reimburses such costs to participants in joint operations. There is therefore an unaddressed risk of double funding (9). |
COMMENTS ON BUDGETARY MANAGEMENT
15. |
The level of carry-overs for committed appropriations was high for Title II (administrative expenditure) at 3,2 million euro, i.e. 38 % (2014: 4,5 million euro, i.e. 36 %) and Title III (operational expenditure) at 40,2 million euro, i.e. 35 % (2014: 28,4 million euro, i.e. 44 %). For Title II, the main reason for high carry-overs is IT contracts extending beyond the year-end whereas for Title III, it is the multiannual nature of the Agency’s operations. |
OTHER COMMENTS
16. |
States participating in border operations declare the costs incurred on the basis of cost claim sheets which comprise ‘fixed expenses’ (depreciation and maintenance), ‘variable expenses’ (mostly fuel) and ‘mission expenses’ (mostly allowances and other crew expenses). The costs declared are based on real values and follow national standards leading to divergent approaches among participating states which creates a particularly burdensome system for all parties involved. The Court in its Special Report 12/2016 recommended that agencies should use simplified cost options whenever appropriate to avoid such inefficiencies (10). |
FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS
17. |
An overview of the corrective actions taken in response to the Court’s comments from previous years is provided in the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 4 October 2016.
For the Court of Auditors
Klaus-Heiner LEHNE
President
(1) OJ L 349, 25.11.2004, p. 1.
(2) More information on the Agency competences and activities is available on its website: www.frontex.europa.eu
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(3) These include the balance sheet and statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
(9) The Court had referred to this risk in paragraph 39 and recommendation 4 of its Special Report 15/2014 ‘The External Borders Fund has fostered financial solidarity but requires better measurement of results and needs to provide further EU added value’.
(10) Recommendation 1 in the Court’s Special Report 12/2016 ‘Agencies’ use of grants: not always appropriate or demonstrably effective’.
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
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 |
2013 |
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. |
Ongoing |
2013 |
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. |
Ongoing |
2014 |
Considerable improvements were noted in both ex ante and ex post verifications of expenditure claimed by cooperating countries under grant agreements. However, documentation from cooperating countries supporting the expenditure claimed is not always sufficient. Moreover, no audit certificates were requested, although the rules of application of the EU’s Financial Regulation recommend this for grants above specific thresholds (1). Audit certificates would add further assurance on the legality and regularity of grant transactions. |
Ongoing |
2014 |
The level of carry-overs for committed appropriations was high for title II (administrative expenditure) at 4,5 million euro, i.e. 36 % (2013: 2,4 million euro, i.e. 27 %) and title III (operational expenditure) at 28,4 million euro, i.e. 44 % (2013: 29,2 million euro, i.e. 47 %). For title II, the main reason is year-end purchases related to the move to the agency’s new building in December 2014. For title III, high carry-overs mainly result from the multiannual nature of the agency’s operations and the approval of an additional 4,2 million euro budget in October 2014. |
N/A |
2014 |
The high and constantly increasing number of grant agreements and the magnitude of related expenditure to be verified and reimbursed by FRONTEX raise the question whether more efficient and cost-effective alternative funding mechanisms could be used. |
Outstanding (2) |
2014 |
There is a need to refine the calculation of contributions from Schengen associated countries (Switzerland, Liechtenstein, Iceland and Norway) to better reflect the related legal provisions (3). For example, the calculation should be based on the final instead of the budgeted annual subsidy received from the Commission. |
Ongoing |
2014 |
Contributions to the Agency’s budget from the United Kingdom and Ireland (which are non-Schengen countries) have remained stable for many years despite the considerably extended range of activities in which they are involved. A review of their contributions is therefore overdue. |
Completed |
(1) Commission Delegated Regulation (EU) No 1268/2012 (OJ L 362, 31.12.2012, p. 1).
(2) Article 3(4) of Council Regulation (EC) No 2007/2004 (OJ L 349, 25.11.2004, p. 1) limits the Agency’s co-financing of joint operations to grants.
(3) Arrangement between the European Community of the one part, and the Swiss Confederation and the Principality of Liechtenstein, of the other part, on the modalities of the participation by those States in the European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union (OJ L 243, 16.9.2010, p. 4); Arrangement between the European Community and the Republic of Iceland and the Kingdom of Norway on the modalities of the participation by those States in the European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union (OJ L 188, 20.7.2007, p. 19).
THE AGENCY’S REPLY
9. |
The Agency will further improve its procedure for estimating the costs to be accrued. |
13. |
The implementing rules to the Frontex Financial Regulation provide that the Authorising Officer may waive recovery of an established amount where recovery is inconsistent with the principle of proportionality. In line with that principle and after having received external legal advice, the Authorising Officer announced the recovery of 0,6 million euro; the recovery covers grants awarded since 2014. He also announced, for the same reason, not to reimburse 0,2 million euro due in 2016. |
14. |
In 2016, mitigating measures put in place in cooperation with DG HOME so far are the access to the ISF database, where all plans and reports of the beneficiaries are made available. DG HOME also intends to invite Frontex to the Asylum, Migration and Integration and Internal Security Funds Committee in autumn 2016 to present the situation from its perspective and to discuss with Member States. |
15. |
Frontex acknowledges the explanations provided by the Court on the amounts of carry-overs. The Agency will continue its efforts to reduce the amounts of carry-overs in view of honouring better the annuality principle. |
16. |
The system in place for reimbursing costs aims at ensuring equal treatment of beneficiaries as the same cost categories can be financed for each of them. Nevertheless, the Agency agrees with the Court that reimbursing costs based on real values is cumbersome and the introduction of unit costs is a viable option, which the Agency will pursue. Furthermore, the proposal for the Border and Coast Guard Agency may likely remove the obligation to use grants, which will pave the way for using new funding mechanisms for the Agency beyond grants. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/214 |
REPORT
on the annual accounts of the European GNSS Agency for the financial year 2015, together with the Agency’s reply
(2016/C 449/40)
INTRODUCTION
1. |
The European GNSS (Global Navigation Satellite System) Agency (hereinafter ‘the Agency’, aka ‘GSA’), which was relocated from Brussels to Prague as of 1 September 2012 (1), was set up by Regulation (EU) No 912/2010 of the European Parliament and the Council (2) setting up the European GNSS Agency, repealing Council Regulation (EC) No 1321/2004 (3) on the establishment of structures for the management of the European satellite radio navigation programmes and amending Regulation (EC) No 683/2008 of the European Parliament and of the Council (4). The GSA officially took over all tasks previously assigned to the GALILEO Joint Undertaking on 1 January 2007 which are continued by the GSA as ‘European GNSS Agency’ within the scope of Regulation (EU) No 912/2010, as amended. In addition, the Commission entrusted the exploitation of the European Geostationary Navigation Overlay Service (EGNOS) to the Agency through a delegation agreement. |
2. |
The Table presents key figures for the Agency (5). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON THE RELIABILITY OF THE ACCOUNTS
12. |
The last validation of the accounting systems was performed in 2012. The promised validation due to the expected major changes of processes and information flow following the Agency’s relocation has not occurred. The new accountant plans to perform the next validation in 2020. |
COMMENTS ON INTERNAL CONTROLS
13. |
The Agency has put in place Business Continuity Plans for the security sites in France, the United Kingdom and the Netherlands. However, there is no Business Continuity Plan in place for the Headquarters in Prague and the Agency in its entirety. |
COMMENTS ON BUDGETARY MANAGEMENT
14. |
The Agency’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. |
15. |
The level of carry-overs for committed appropriations was high for Title II (administrative expenditure) at 2,5 million euro, i.e. 42 % (2014: 3,4 million euro, i.e. 54 %). These carry-overs mainly relate to services provided in 2015 for which invoices were not received until 2016, a number of high value IT contracts, as well as a risk assessment contract signed at the end of 2015. These projects, originally planned for 2016, were started in 2015 to utilise funds released from savings on other budget lines. |
OTHER COMMENTS
16. |
The Agency’s 2015 Annual Work Programme (AWP) was only adopted in March 2015 and the adoption of its 2014-2020 Multi-annual Work Programme is outstanding. The late adoption of key planning documents puts the achievement of the Agency’s objectives at risk. |
17. |
In 2015, the Agency had a high staff turnover with 14 staff members leaving and 26 joining. |
FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS
18. |
An overview of the corrective actions taken in response to the Court's comments from previous years is provided in the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 4 October 2016.
For the Court of Auditors
Klaus-Heiner LEHNE
President
(1) Decision 2010/803/EU taken by common accord between the Representatives of the Governments of the Member States (OJ L 342, 28.12.2010, p. 15).
(2) OJ L 276, 20.10.2010, p. 11.
(3) OJ L 246, 20.7.2004, p. 1.
(4) OJ L 196, 24.7.2008, p. 1.
(5) More information on the Agency's competences and activities is available on its website: http://www.gsa.europa.eu/
(1) Budget figures are based on payment appropriations.
(2) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(6) These include the balance sheet and the statement of financial performance, the cash flow table, the statement of changes in net assets and a summary of the significant accounting policies and other explanatory notes.
(7) These comprise the budgetary outturn account and the annex to the budgetary outturn account.
(8) Articles 39 and 50 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).
(9) 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.
(10) Article 107 of Delegated Regulation (EU) No 1271/2013.
(11) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
The level of carry-overs for committed appropriations was high for title II, administrative expenditure, at 3,4 million euro, i.e. 54 % (2013: 1,8 million euro, i.e. 52 %). These carry-overs mainly concerned services provided to the Agency in 2014 for which invoices were not received until 2015, and a number of high value IT contracts signed at the end of 2014. These IT projects, originally planned for 2015, were started in 2014 to utilise funds released from savings on other budget lines. |
N/A |
2014 |
In 2013 the Agency had awarded an eight-year (1 January 2014-31 December 2021) service contract for the exploitation of the European Geostationary Navigation Overlay Service (EGNOS) with a value of 436 million euro (initial contract) to a contractor. In 2014 following a direct negotiated procedure, GSA amended the initial contract for an amount of 6,3 million euro for the purchase and maintenance of 14 satellite signal receivers and 14 signal generators and some other equipment in relation to EGNOS. An arrangement between the contractor and its two subcontractors was set up, as under the initial contract, which led to an accumulation of overheads and profits. Out of the 6,3 million, only 3,2 million related to direct costs (materials, labour, transport and insurance, travel and subsistence). Overheads and other costs accounted for 1,4 million and profits and remuneration of (sub)contractors for 1,7 million. |
N/A |
2014 |
There is no insurance coverage for fixed tangible assets (net book value 1,0 million euro). |
Ongoing |
THE AGENCY’S REPLY
12. |
Since the last local system validation in 2012 there have not been any changes in local systems. The move of GSA to Prague did not result in any changes of financial circuits or processes and information flows. GSA uses standard European Commission systems validated on a global level and there are no systems interfaced with ABAC and thus impacting the financial information and the annual accounts. The local systems were presented to the new accountant prior to acceptance of its mission. A periodical validation of the accounting systems will take place as stipulated in the Service Level Agreement between DG BUDGET and the GSA on the basis of DG BUDGET’s risk assessment. The risk is currently assessed to be low and the next validation will normally be carried out in 5 years — or in 3 years if there are changes to the systems. |
13. |
The Agency’s global BCP has so far not been updated. The reason for this is the Agency’s decision to focus in priority on securing continuity plans for its new sites, based on the assessment that for the purpose of ICS 10 the existing BCP was momentarily sufficient for its headquarters pending stabilisation of its operations and activities within such headquarters. It is the Agency’s intention to proceed to such BCP update at global level within the coming year. |
14. |
Based on a service level agreement signed with DG BUDG the Agency’s accounts and related reports have been prepared by the Commission’s accountant and the Agency assumed them to be in line with accepted practice. |
15. |
The GSA made significant efforts to reduce the traditionally high level of carry-overs on Title 2 and succeeded in lowering the rate from 54 % in 2014 to only 42 % in 2015. Due to the quarterly nature of invoicing of several large contracts, certain high-value invoices relating to 2015 services were only received in 2016. Staff turnover was unexpectedly high in 2015, resulting in far lower than predicted expenditure on staff at year end which was subsequently used to fund other activities originally planned for later years. The high level of carry-over therefore allowed forward-looking reprioritisation, while avoiding cancellations. |
16. |
The GSA observes that all steps at GSA level related to AWP preparation and submission were completed timely. Therefore, the GSA continues to work closely with the Commission as a key stakeholder to ensuring the timely adoption of future AWPs and the MAWP. The GSA recalls that a large part of its activities, that are delegated activities, are not directly affected by the timing of AWP adoption. |
17. |
The Agency recognises a relatively high turnover, resulting from certain difficulties in attracting and retaining key staff in a very competitive and technical segment of the employment market, essentially due to its HQ location and the related disproportionately low and steadily decreasing EU correction coefficient affecting salary levels in Prague, CZ. The Agency is pursuing all available ways in order to increase its attractiveness, e.g. by insisting on the significance of its mission. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/219 |
REPORT
on the annual accounts of the Innovation and Networks Executive Agency for the financial year 2015, together with the Agency’s reply
(2016/C 449/41)
INTRODUCTION
1. |
The Innovation and Networks Executive Agency (INEA — hereinafter ‘the Agency’), which is located in Brussels, was set up by Commission Decision 2013/801/EU (1) to replace and succeed the Trans-European Transport Network Executive Agency. The Agency was established for a period beginning on 1 January 2014 and ending on 31 December 2024 for the management of EU actions in relation to the Connecting Europe Facility, the Horizon 2020 Research and Innovation Funding programme, the trans-European transport network and the Marco Polo programme. |
2. |
The Table presents key figures for the Agency (2). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
The level of carry-overs for committed appropriations was high for Title III (operational expenditure) at 0,5 million euro, i.e. 51 % (2014: 0,4 million euro, i.e. 56 %). The main cause was the conclusion of IT and audit contracts for services to be delivered after the 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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 352, 24.12.2013, p. 65.
(2) More information on the Agency’s competences and activities is available on its website: www.ec.europa.eu/inea
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(3) These include the balance sheet and the statement of financial performance, 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 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).
(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 162 of Regulation (EU, Euratom) No 966/2012.
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2014 |
The level of carry-overs for committed appropriations was high for title II at 0,8 million euro, i.e. 25 % (2013: 0,7 million euro/27 %) and title III at 0,4 million euro, i.e. 56 % (2013: 0,1 million euro/22 %). The main causes were the purchase of equipment for the additional office space rented to accommodate the Agency’s increased staff, IT contracts concluded as planned in the second half of 2014 but invoiced in 2015, and expenditure related to Service Level Agreements with the Commission for which invoices were not received until 2015. |
N/A |
THE AGENCY’S REPLY
12. |
Early in 2015 the Agency concluded IT contracts for services to be provided between March 2015 and March 2016; the services provided between October 2015 and March 2016 are invoiced only in 2016. As regards the outsourced audits of beneficiaries in 2015, final payments can be made only after the contradictory procedures which could not be completed before the end of the year. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/224 |
REPORT
on the annual accounts of the Office for Harmonization in the Internal Market for the financial year 2015, together with the Office’s reply
(2016/C 449/42)
INTRODUCTION
1. |
The Office for Harmonization in the Internal Market (1) (hereinafter ‘the Office’, aka ‘OHIM’), which is located in Alicante, was established by Council Regulation (EC) No 40/94 (2), which was repealed and replaced by Regulation (EC) No 207/2009 (3). The Office’s task is to implement the Union legislation on trademarks and designs, which gives undertakings uniform protection throughout the entire area of the European Union. |
2. |
The table presents key figures for the Office (4). Table Key figures for the Office
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
11. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
12. |
The level of committed appropriations carried over to 2016 was high for Title III at 12,9 million euro, i.e. 36 % (2014: 14,1 million euro, i.e. 38 %). The carry-overs mainly relate to cooperation agreements with national offices which submit cost claims only after year-end. |
OTHER COMMENTS
13. |
The procurement of services based on a negotiated procedure without publication of a contract notice limits competition to a single negotiating party and should therefore only be used in exceptional circumstances. The Office, following this procedure, in 2015 extended six framework contracts with a value of extended services of 1,9 million euro (in 2014: 12 framework contracts with a value of extended services of 12,6 million euro) (10). The Office’s use of this procedure cannot be considered as ‘exceptional’ given the number, value and frequency of such contracts and did not fully comply with the formal requirements (11). |
14. |
The Office reimburses part or all of the gross salary of seconded national experts (‘SNEs’) to their employers. This deviates from the Commission’s practice that SNEs’ employers continue to pay their salaries. In 2015, these reimbursements amounted to 1,9 million euro. |
15. |
As at 31 December 2015, nine OHIM staff members were seconded in the interest of the service to the OHIM Board of Appeal. However the EU Staff Regulations do not provide for such secondments (12). |
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 the Annex. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) As of 23 March 2016, the Office is called the European Union Intellectual Property Office (EUIPO) and the Community trade mark is called the European Union trade mark.
(4) More information on the Office’s competences and activities is available on its website: https://euipo.europa.eu/ohimportal/en
(1) Budget figure includes the reserve for unforeseen events.
(2) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Office
(5) These include the balance sheet and the statement of financial performance, 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 38 and 43 of Regulation No CB-3-09 of the Budget Committee of the Office for Harmonization in the Internal Market.
(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) Articles 91 to 95 of Regulation No CB-3-09 of the Budget Committee of the Office for Harmonization in the Internal Market.
(10) Framework contracts extended based on Article 134(1)(f) of Commission Delegated Regulation (EU) No 1268/2012 (OJ L 362, 31.12.2012, p. 1).
(11) As stipulated in Article 134(3) of Delegated Regulation (EU) No 1268/2012.
(12) Article 37(a) of Regulation No 31 (EEC), 11 (EAEC), laying down the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Economic Community and the European Atomic Energy Community (OJ 45, 14.6.1962, p. 1385/62).
ANNEX
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2013 |
The amount of cancelled carry-overs from previous years increased from 4,2 million euro (13 %) in 2012 to 6,0 million (16 %) in 2013. In both years this was mainly due to lower than estimated costs to be reimbursed under cooperation agreements with Member States’ national offices (1,9 million euro in 2012 and 3,8 million euro in 2013), which indicates the need to obtain more accurate information from national offices at year-end on the actual cost incurred. |
Completed |
2013 |
The Office has a business continuity and crisis management plan in place which stipulates that some 25 roles have to be covered permanently by employees on stand-by duty. Although budget appropriations for stand-by duty allowances are approved annually by the Office’s Budget Committee, the amount paid in 2013 (402 458 euro) considerably exceeds such allowances paid by other agencies which need to ensure permanent service. |
Ongoing |
2014 |
In its 2013 Report on the annual accounts of the Office the Court questioned the amount spent on stand-by allowances (0,40 million euro). Such payments were higher in 2014 (0,44 million euro). In November 2014 the Office revised its policy and reduced the number of roles entitled to stand-by duty allowances from 25 to 17, the financial effect of which will be seen from 2015 (1). Nine staff members, seven of whom are managers, received more than 11 000 euro each in stand-by allowances. |
Ongoing |
However, the system (stand by duty allowances) is poorly controlled, and staff on sick leave, missions abroad or on holiday have been paid allowances. |
Completed |
|
2014 |
The amount of cancelled carry-overs from previous years decreased from 6,0 million euro (16 %) in 2013 to 5,1 million (13 %) in 2014. In both years this was mainly due to lower than estimated costs to be reimbursed under cooperation agreements with Member States’ national offices (3,2 million euro in 2014 and 3,8 million euro in 2013), which indicates the need to obtain more accurate information from national offices at year-end on the actual cost incurred. The level of committed 2014 appropriations for the different titles varied between 94 % and 97 % of total appropriations, indicating that legal commitments were made in a timely manner. The level of committed appropriations carried over to 2015 was high for Title III at 14,1 million euro, i.e. 38 % (2013: 13,3 million euro, i.e. 38 %). It was mainly related to cooperation agreements with national offices, for which cost claims were not due to be submitted by the national offices until 2015, and the usual order of translation services in the last two months of 2014, which were only due for payment in 2015. |
N/A |
2014 |
In 2004 new EU Staff Regulations entered into force, including provisions that future remunerations of officials recruited before May 2004 should not be less than under the previous EU Staff Regulations. The Court’s audit revealed that this was not complied with and, in the case of four of the 648 staff members employed at that time, this led to a total underpayment of 96 998 euro for the period 2005 to 2014. The amount is not material and does not put the reliability of the Office’s accounts into question. The Office decided to make the supplementary salary payments in due course. |
Completed (2) |
(1) In 2015 the Office paid 285 242 euro for stand-by duty allowances and 13 roles were entitled to it.
(2) The Office made the supplementary salary payments in August 2015.
THE OFFICE’S REPLY
12. |
In 2015, the Office has put in place several measures in order to reduce the historical high level of carry-overs; such as raising awareness through coaching, training, information notes and meetings with the financial actors. Thorough analysis of all commitments above 100 000 euro during December, permanencies of the financial actors during the whole Christmas period in order to pay invoices until 31 December 2015, amongst others, have enabled the Office to reduce the carry-overs in Title II from 21 % in 2014 to 16 % in 2015 and from 38 % in Title III in 2014 to 36 % in 2015. The Office continues to put in place further measures to lower the high level of carry-overs in Title III which, as pointed out by the Court, are mainly related to the structural characteristics of the cooperation activities with Member States’ IP national offices (the majority should be considered as planned carry-overs). |
13. |
The Office acknowledges that it has made frequent use of Article 134 RAP and is taking short-, mid- and long-term actions in order to improve the management and control of its procurement and contracting processes. These measures include that the negotiated procedure without prior publication of a contract notice shall only be used in duly justified cases. |
14. |
The Office understands there is no legal obligation to strictly align both texts as SNEs are not covered by the Staff Regulations. The new founding regulation (Article 116) foresees the Office’s Management Board to adopt a decision laying down rules on the secondment of national experts to the Office. On 31 May a decision was adopted by the Management Board of the Office acknowledging the existing practice. |
15. |
The Office understands that the Staff Regulations do not give a clear answer about the administrative status that should apply to OHIM officials and temporary agents appointed at the Boards of Appeal. Nevertheless, the Office took note of the Court’s observation and brought this issue to its Management Board on 26 May 2016 who adopted the decision to maintain the current practice. |
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/230 |
REPORT
on the annual accounts of the Research Executive Agency for the financial year 2015, together with the Agency’s reply
(2016/C 449/43)
INTRODUCTION
1. |
The Research Executive Agency (hereinafter ‘the Agency’, aka ‘REA’), which is located in Brussels, was set up by Commission Decision 2008/46/EC (1). The Agency was established for a limited period beginning on 1 January 2008 and ending on 31 December 2017 with the aim of managing specific Union activities in the field of research. On 15 June 2009 the Agency was officially granted its administrative and operational autonomy by the European Commission. |
2. |
The Table presents key figures for the Agency (2). Table Key figures for the Agency
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
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. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(2) More information on the Agency's competences and activities is available on its website: www.ec.europa.eu/rea
(1) Budget figures are based on payment appropriations.
(2) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Agency.
(3) These include the balance sheet and the statement of financial performance, 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 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).
(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 162 of Regulation (EU, Euratom) No 966/2012.
THE AGENCY’S REPLY
The Agency has taken note of the Court’s report.
1.12.2016 |
EN |
Official Journal of the European Union |
C 449/234 |
REPORT
on the annual accounts of the Single Resolution Board for the financial year 2015, together with the Board’s reply
(2016/C 449/44)
INTRODUCTION
1. |
The Single Resolution Board (hereinafter ‘the Board’, aka ‘SRB’), which is located in Brussels, was established by Regulation (EU) No 806/2014 on the Single Resolution Mechanism (‘SRM Regulation’) (1). The Board’s mission is to ensure an orderly resolution of failing banks with minimum impact on the real economy and on public finances of the participating Member States and beyond. |
2. |
The Board has been operational as an independent EU Agency as of 1 January 2015. However the Commission was responsible for the establishment and initial operation of the Board. It is only as of 8 April 2015 that the Board has the operational capacity to manage its resources autonomously. |
3. |
The Table presents key figures for the Board (2). Table Key figures for the Board
|
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
4. |
The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of key controls of the Board’s supervisory and control systems. This is supplemented by evidence provided by the work of other auditors and an analysis of management representations. |
STATEMENT OF ASSURANCE
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Opinion on the legality and regularity of the transactions underlying the accounts
|
12. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON THE RELIABILITY OF THE ACCOUNTS
13. |
Article 92(4) of the SRM Regulation requires the Court to report in particular on the contingent liabilities of the Board, the Council and the Commission as a result of the performance of their tasks under the SRM Regulation. The Court will report on this matter in a separate report. |
COMMENTS ON INTERNAL CONTROLS
14. |
In 2015 the Board became operational and gradually set up its internal control environment. However a number of essential procedures and controls remain to be drafted, adopted or implemented, including the risk management and control strategy, the internal control standards, the periodic assessment of the sound functioning of the internal control system and the anti-fraud strategy. |
COMMENTS ON BUDGETARY MANAGEMENT
15. |
The budget of the SRB is funded through contributions from credit institutions and amounted to 22 million euro in 2015. The SRB committed 67 % of the called budget and used 45 % of it. The low implementation rate resulted in a significant budget surplus of 7,7 million euro. |
16. |
Carry-overs of committed appropriations are high for Title II (administrative expenditure) at 3,6 million euro, i.e. 70,4 %. These carry overs mainly concern contracts which have been concluded in 2015 for the new premises of the SRB (e.g. IT infrastructure, security infrastructure and office equipment) whereby the services and goods had not yet been fully delivered or invoiced by the end of 2015. |
17. |
Carry-overs of committed appropriations are high for Title III (operational expenditure) at 0,6 million euro, i.e. 40,3 %. These carry overs mainly concern consultancy services for the ‘Collection of contributions project’ which have not yet been fully delivered or invoiced by the end of 2015. |
OTHER COMMENTS
18. |
In 2015, the SRB signed a contract for its new headquarters in Brussels with a minimum duration of 15 years and a total value of at least 42,4 million euro. The procurement procedure was poorly documented and the location in the contract notice restricted it to one of the most expensive areas in Brussels excluding possible cheaper options. |
This Report was adopted by Chamber IV, headed by Mr Baudilio TOMÉ MUGURUZA, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2016.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 225, 30.7.2014, p. 1.
(2) More information on the Board’s competences and activities is available on its website: http://srb.europa.eu/
(1) Staff includes officials, temporary and contract staff and seconded national experts.
Source: data provided by the Board.
(3) These include the balance sheet and the statement of financial performance, 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.
(8) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).
THE BOARD’S REPLY
14. |
Although the Single Resolution Board (the ‘SRB’ or the ‘Board’) is in its start-up phase, work on the formalisation of internal procedures is under way as a priority and is expected to be completed by the end of 2017. Critical areas and activities are being identified and measures are being put in place to be compliant. The Board has not formally adopted the internal control standards, but has complied already with several of them. |
15. |
2014/2015 budget estimations were drawn up under conditions of uncertainty by the European Commission’s Task Force and before the Board was even set up. Furthermore, according to the SRM Regulation, the SRB collects in advance the contributions of each year. It is also foreseen that any potential positive budget outturn will not result in the accumulation of reserves, but it will decrease accordingly the amount to be charged to the financial institutions in the upcoming year. |
16. |
The Board accepts the comment and points out that the carry-overs are related mainly to the initial investments necessary for the entry into operations of SRB. |
17. |
The Board accepts the comment, however points out that from the total amount of 0,6 million euro carried forward for Title Ill, the main part (82 %) was for events/services that have already occured or been delivered in 2015. Therefore they were accrued accordingly in the accounts. At year end, these services were simply not yet invoiced by the vendors. |
18. |
As SRB was in its start-up phase, the Board made use of the expertise of the Commission (OIB) for launching the negotiated procedure for its new premises. In this respect:
Regarding the location, the requirements were based on the SRB’s needs with respect to the nature of its tasks and the necessity to be in close proximity with the Commission (DG FISMA, DG COMP) and the Council in the event of resolution of banks which must be managed under the 24 hours rule and thus requiring a place with access to those institutions within walking distance. In light of the above, a strategic and political decision was taken by the European Commission’s Task Force to remain within the European District. |