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Document 52015TA1209(02)
Report on the annual accounts of the Agency for the Cooperation of Energy Regulators for the financial year 2014 together with the Agency’s reply
Report on the annual accounts of the Agency for the Cooperation of Energy Regulators for the financial year 2014 together with the Agency’s reply
Report on the annual accounts of the Agency for the Cooperation of Energy Regulators for the financial year 2014 together with the Agency’s reply
IO C 409, 9.12.2015, p. 18–26
(BG, ES, CS, DA, DE, ET, EL, EN, FR, HR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV)
9.12.2015 |
EN |
Official Journal of the European Union |
C 409/18 |
REPORT
on the annual accounts of the Agency for the Cooperation of Energy Regulators for the financial year 2014 together with the Agency’s reply
(2015/C 409/02)
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 new additional responsibilities, together with national regulatory authorities, regarding the monitoring of the European wholesale energy market (3). |
INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE
2. |
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
|
10. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY MANAGEMENT
11. |
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 (10). 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. |
12. |
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 (11). Although this will allow the Agency to finance its future REMIT-related activities, this is in contradiction with the budgetary principle of annuality. |
OTHER COMMENTS
13. |
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. |
FOLLOW-UP OF PREVIOUS YEARS’ COMMENTS
14. |
An overview of the corrective actions taken in response to the Court’s comments from the previous years is provided in Annex I. |
This Report was adopted by Chamber IV, headed by Mr Milan Martin CVIKL, Member of the Court of Auditors, in Luxembourg at its meeting of 8 September 2015.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(1) OJ L 211, 14.8.2009, p. 1.
(2) Regulation No 1227/2011 of the European Parliament and of the Council (OJ L 326, 8.12.2011, p. 1), which assigns an important role to the Agency in supervising trading in wholesale energy markets across Europe.
(3) Annex II summarises the Agency’s competences and activities. It is presented for information purposes.
(4) These include the balance sheet and the 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).
(10) Commission Implementing Regulation (EU) No 1348/2014 (OJ L 363, 18.12.2014, p. 121).
(11) Article 13 of the EU Financial Regulation stipulates that amounts can be carried over for one financial year only.
ANNEX I
Follow-up of previous years’ comments
Year |
Court's comment |
Status of corrective action (Completed/Ongoing/Outstanding/N/A) |
2012 |
The Agency held 4,2 million euro in cash at the year end, including the 2011 budget surplus of 1,6 million euro which resulted from an excessive call for funds in 2011 and was recovered by the Commission in January 2013. This is not consistent with a rigorous treasury management. |
Completed |
2012 |
The audited recruitment procedures revealed shortcomings affecting transparency and an equal treatment of candidates: questions for interviews and tests were not set before the examination of the applications. The conditions for admission to written tests and interviews and for being included in the list of suitable candidates were not specified in sufficient detail and the measures taken to ensure the anonymity of candidates sitting written tests were inadequate. |
Completed |
2013 |
The Agency carried over 1,9 million euro or 56 % of total committed title II appropriations (Agency’s building and associated costs), mainly related to the implementation of the REMIT regulation. This is an operational, multiannual activity and should have been budgeted under title III, a shortcoming which was rectified in subsequent commitment appropriations. |
Completed |
2013 |
In addition, the Agency carried over 3,1 million euro or 91 % of total committed title III appropriations, also related to the implementation of the REMIT regulation. The exceptionally high rate of carry-over for title III is mainly due to some 3 million euro in additional funding received through an amended budget approved on 31 October 2013. |
N/A |
2013 |
The Agency held 5,5 million euro in cash at year-end, which included some 3 million euro relating to the late budget amendment. Nevertheless, average cash balances during the year were significantly higher than justified by operational requirements. |
Completed |
ANNEX II
Agency for the Cooperation of Energy Regulators (Ljubljana)
Competences and activities
Areas of Union competence deriving from the Treaty (Article 114 (ex Article 95 TEC) and Article 194 of the Treaty on the Functioning of the European Union) |
The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market. In the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment, Union policy on energy shall aim, in a spirit of solidarity between Member States to:
The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall establish the measures necessary to achieve these objectives. Such measures shall be adopted after consultation of the Economic and Social Committee and the Committee of the Regions. |
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Competences of the Agency (As specified in Regulation (EC) No 713/2009 of the European Parliament and of the Council; Commission Regulation (EU) No 838/2010; Regulation (EU) No 1227/2011 of the European Parliament and of the Council) Regulation (EU) No 347/2013 of the European Parliament and the Council of 17 April 2013 on guidelines for trans-European energy infrastructure and repealing Decision No 1364/2006/EC and amending Regulations (EC) No 713/2009, (EC) No 714/2009 and (EC) No 715/2009 |
Objectives The purpose of the Agency is to assist National Regulatory Authorities in exercising, at Union level, the regulatory tasks that they perform in the Member States and, where necessary, to coordinate their action. Tasks
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Governance |
Administrative Board Composition: Two members appointed by the European Parliament, two members appointed by the Commission and five members appointed by the Council. Each member has an alternate. Tasks: The Administrative Board adopts the Agency’s annual programme and budget and monitors their implementation. Director Appointed by the Administrative Board after a favourable opinion from the Board of Regulators and on the basis of a list of candidates proposed by the Commission. Board of Regulators Composition: A senior representative of the regulatory authorities from each Member State and one non-voting representative of the Commission. Each member has an alternate nominated by the national regulatory authority of each Member State. Tasks: The Board
External audit Court of Auditors. Discharge Authority European Parliament acting on a recommendation from the Council. |
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Resources made available to the Agency in 2014 (2013) |
Final Budget 2014 10,88(11,9) million euro Staff as at 31 December 2014 Posts listed in the establishment plan: 54 (49) Posts occupied on 31 December: 52 (49) Other staff: 18 (20) Total staff: 72 (69), of which assigned to:
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Products and services 2014 |
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Source: Annex provided by the Agency. |
THE AGENCY’S REPLY
11. |
The Agency had requested the necessary funds to implement REMIT in its draft budget for 2013, adopted by its Administrative Board in March 2012. However, these funds were initially not assigned to the Agency in the 2013 EU budget and only made available through a transfer of 2,989 million euro from DG ENER in October 2013, resulting in an amendment of the Agency’s budget on 31 October 2013. Despite this late amendment, the Agency successfully managed to commit it against the awarded, REMIT-related contracts. The adoption of the Commission Implementing Regulation for REMIT was expected for January but delayed until December 2014 and the Agency had to put on hold the part of the project that could only progress once the Implementing Regulation entered into force. |
12. |
The Agency notes that the multi-annual nature of the REMIT project might be incompatible with the principle of budget annuality, especially given the delays in making funds available and in the adoption of the REMIT Implementing Acts (see above). Under these circumstances, the Agency did its best to ensure the proper and effective implementation of REMIT, by committing the received amended budget before the end of the year 2013 towards the required investment in infrastructure to host the Agency’s REMIT Information System (ARIS) and the fees for the operating licences, thus preparing for launching the operations once the Implementing Acts entered into force (expected beginning of 2014). The Agency is using non-differentiated appropriations for its commitments and payments, therefore the 2013 committed appropriations could either be used before the end of 2014 or cancelled. The mentioned delays required the Agency to amend some contracts in order to postpone the delivery of the contracted services and not to cancel the funds received via the 2013 budget amendment. The use of pre-financing payments backed-up by bank guarantees was found to be the best solution to ensure the future implementation of REMIT. The Agency is currently analysing the possibility of using differentiated appropriation in the future in order to minimise the level of carry-overs. |
13. |
The establishment of a European School in Ljubljana has been discussed several times with the Ministry of Foreign Affairs and the Ministry of Education. The Agency has been recently informed that the Slovenian Government is assessing the necessary legal amendments and arrangements in order to find the optimal solution. Until now, adequate schooling has been provided to the children of Agency’s staff through the public and private educational establishments. |