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Document 52004TA1230(12)

Report on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the 2003 financial year together with the Monitoring Centre's replies

JO C 324, 30.12.2004, p. 83–90 (ES, CS, DA, DE, ET, EL, EN, FR, IT, LV, LT, HU, MT, NL, PL, PT, SK, SL, FI, SV)

Date of document:: 30/09/2004

Author:: Curtea de Conturi Europeană
Form:: Raport

Treaty:

Tratatul de instituire a Comunităţii Europene

Legal basis:

12002E248

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Directory code:

01.60.20.00 Probleme generale, financiare şi instituţionale / Dispoziţii financiare şi bugetare / Buget

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Official Journal

30.12.2004

Official Journal of the European Union

C 324/83

REPORT

on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the 2003 financial year together with the Monitoring Centre's replies

(2004/C 324/12)

CONTENTS

1	INTRODUCTION

2-5	THE COURT'S OPINION

6-11	OBSERVATIONS

Tables 1 to 4

The Monitoring Centre's replies

INTRODUCTION

The European Monitoring Centre for Drugs and Drug Addiction (hereinafter called ‘the Monitoring Centre’) was established by Council Regulation (EEC) No 302/93 of 8 February 1993 (1). Its main objective is to collect data on drugs and drug addiction in order to prepare and publish information that is objective, reliable and comparable at European level. The information is intended to provide a basis for analysing demand for drugs and ways of reducing both it and drug-market-related events in general. Table 1 summarises the Monitoring Centre's competencies and activities on the basis of information received from it.

THE COURT'S OPINION

2.	This opinion is addressed to the European Parliament and the Council, in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (2).

The Court has examined the annual accounts of the Monitoring Centre for the financial year ended 31 December 2003. In accordance with Article 11 of Council Regulation (EEC) No 302/93, the budget was implemented on the responsibility of the Director. This responsibility included the drawing-up and presentation of the accounts (3) in accordance with the internal financial provisions adopted under the same article. The Court of Auditors is required under Article 248 of the Treaty establishing the European Community to audit these accounts.

The Court carried out its audit in accordance with its auditing policies and standards, which have been adapted from generally accepted international auditing standards to reflect the specific nature of the Community context. The Court carried out such tests on the accounting records and applied such other procedures as it deemed necessary in the circumstances.

The Court has thus obtained reasonable assurance that the annual accounts for the year ended 31 December 2003 are reliable and that the underlying transactions, taken as a whole, are legal and regular. The observations which follow do not call into question the audit opinion expressed by the Court in this report.

OBSERVATIONS

The implementation of the appropriations for the 2003 financial year and of the appropriations carried over from the previous financial year is shown in Table 2. The Monitoring Centre's revenue and expenditure account and balance sheet for the financial year 2003 are presented in summary form in Tables 3 and 4.

The duties of Authorising Officer for the greater part of the Monitoring Centre's budget (Titles I and II) and of the ex ante Controller for the entire budget are performed by just one person, who also carries out the duties of Head of Administration and of Quality Control. This combination of responsibilities significantly undermines internal control, which is based in particular on the principle of segregation of duties.

Following the adoption of its new financial regulation (4), the Monitoring Centre issued in-house instructions for checking commitments, payments and recoveries. However, the files do not contain documents enabling the Authorising Officer to obtain assurance that all these instructions have actually been followed.

Article 42(1)(e) of the Monitoring Centre's financial regulation provides that the Accounting Officer should validate the systems laid down by the Authorising Officer and intended to provide or substantiate accounting information. This validation had still not been carried out at the end of the 2003 financial year.

10.

Under its annual work programme, the Monitoring Centre concludes contracts with national centres. The deadline for the performance of these contracts is fixed at 31 December. The contracts for the 2003 programme (1,5 million euro in total) were not signed until July 2003. In May 2004, no final payments had yet been made in respect of the scheduled work and no additional clauses extending the length of the contracts had been signed. Moreover, the 2004 programme contracts had already been concluded. As regards renewal of these types of contract, due consideration should be given to the real progress achieved in the work requested the year before and to an evaluation of its quality.

11.

In its reply (5) to the Court's annual report concerning the 2002 financial year, the Monitoring Centre stated that a physical inventory would be carried out by the end of 2003. This had still not been done by the end of the first quarter of 2004. In addition, there is still no document that clearly defines the responsibilities and procedures regarding the inventory.

This Report was adopted by the Court of Auditors in Luxembourg at its meeting of 29 and 30 September 2004.

For the Court of Auditors

Juan Manuel FABRA VALLÉS

President

(1) OJ L 36, 12.2.1993. Regulation amended by Regulation (EC) No 3294/94 of 22 December 1994 (OJ L 341, 30.12.1994, p. 7) and Regulation (EC) No 1651/2003 of 18 June 2003 (OJ L 245, 29.9.2003).

(2) OJ L 248, 16.9.2002, p. 1.

(3) As required under Article 82 of Commission Regulation (EC) No 2343/2002, the Monitoring Centre's final accounts for the 2003 financial year were drawn up on 15 September 2004 and forwarded to the Court of Auditors. They were received by the Court on 21 September 2004. A summarised version of these accounts is presented in the tables annexed to this report.

(4) Adopted by the Management Board at the meeting of 15 to 17 January 2003.

(5) OJ C 319, 30.12.2003, p. 68, paragraph 11.

Table 1

European Monitoring Centre for Drugs and Drug Addiction (Lisbon)

Areas of Community competence deriving from the Treaty

Competencies of the Monitoring Centre as defined in Council Regulation (EC) No 302/93

Governance

Resources made available to the Monitoring Centre in 2003

(2002 data)

Products and services supplied in 2003

The Community complements the Member States' action in reducing drugs-related health damage, including information and prevention.

(Article 152 of the Treaty)

Objectives

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

The Monitoring Centre should give priority to analysing the following:

(1)	the demand and reduction of the demand for drugs

(2)	national and Community strategies and policies

(3)	international cooperation and the geopolitics of supply

(4)	control of the trade in narcotics, psychotropic substances and drug precursors

(5)	the implications of drug use for producer, consumer and transit countries, including money-laundering.

Tasks

(1)	To collect and analyse the data

(2)	To make enquiries and carry out preparatory actions

(3)	To ensure that European-level data are more reliable

(4)	To publish reliable information

(5)	To improve coordination between the national and Community actions

(6)	To promote the incorporation of drug-related data into international programmes.

1.	The Management Board comprises one representative from each Member State, two representatives of the Commission and two qualified scientists appointed by the European Parliament. It approves the work programme and general annual report and adopts the budget.

2.	Director: appointed by the Management Board on the Commission's proposal.

3.	Scientific Committee: delivers opinions. It is made up of one representative from each Member State. The Management Board may also appoint a maximum of six other members on the basis of their specific qualifications.

4.	External audit: Court of Auditors.

5.	Discharge: European Parliament on the Council's recommendation.

Budget:

10,45 million euro

(10,36 million euro)

Community subsidy: 89 % (87 %)

Staff numbers as at 31 December 2003:

Number of posts in establishment plan: 63 (59)

Posts occupied: 54 (57)

+18 (16) other staff (auxiliary contracts, seconded national experts, local staff, employment-agency staff)

Total staff: 72 (73)

assigned to the following duties:

operational: 46,5 (46)

administrative: 18 (19)

mixed: 7,5 (8)

Network

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

Publications:

Annual report on the state of the drug problem in the European Union

General report of activities (annual)

Bi-monthly newsletter (Drugnet Europe)

Bi-monthly briefings (Drugs in focus).

Source:information supplied by the Monitoring Centre.

Table 2

European Monitoring Centre for Drugs and Drugs Addiction — Implementation of the budget for the 2003 financial year

(million euro)
Revenue			Expenditure
Origin of revenue	Revenue entered in the final budget for the financial year	Revenue collected	Expenditure allocation	Appropriations in the final budget					Appropriations carried over from the previous financial year			Available appropriations (2003 budget and financial year 2002)
Origin of revenue	Revenue entered in the final budget for the financial year	Revenue collected	Expenditure allocation	entered	committed	paid	carried over	cancelled	outstanding commitments	paid	cancelled	appropriations	committed	paid	carried over	cancelled
Community subsidies	9,3	9,3	Title I Staff	5,4	5,3	5,2	0,1	0,0	0,1	0,1	0,0	5,5	5,4	5,3	0,1	0,0
Phare subsidies	0,5	0,3	Title II Administration	0,9	0,9	0,6	0,3	0,1	0,5	0,5	0,0	1,4	1,4	1,0	0,3	0,1
Other subsidies	0,4	0,4	Title III Operating expenditure	4,0	4,0	2,3	1,7	0,0	1,0	0,8	0,2	5,0	5,0	3,1	1,7	0,2
Other revenue	0,0	0,1	Title III Operating expenditure	4,0	4,0	2,3	1,7	0,0	1,0	0,8	0,2	5,0	5,0	3,1	1,7	0,2
Total	10,2	10,1	Total	10,2	10,2	8,1	2,0	0,1	1,6	1,4	0,2	11,8	11,8	9,5	2,0	0,3
NB:The totals may contain differences due to rounding. Source:Data from the Monitoring Centre. These tables summarise the data provided by the Monitoring Centre in its own accounts.

Table 3

European Monitoring Centre for Drugs and Drug Addiction — Revenue and expenditure account for the financial years 2003 and 2002

(1000 euro)
	2003	2002
Revenue
Commission subsidies	9 300	9 000
Subsidies from Norway	421	413
Phare subsidies	334	735
Other revenue	67	133
Total revenue (a)	10 122	10 280
Expenditure
Staff — Title I of the budget
Payments	5 240	4 951
Appropriations carried over	88	80
Administration — Title II of the budget
Payments	558	632
Appropriations carried over	272	509
Operating expenditure — Title III of the budget
Payments	2 281	2 525
Appropriations carried over	1 679	1 001
Total expenditure (b)	10 117	9 698
Outturn for the financial year (a – b)	5	582
Balance carried over from the previous financial year	1 626	639
Appropriations carried over and cancelled	221	392
Sums for reuse from the previous financial year not used	21	9
Refunds to the Commission	–1 584	—
Exchange-rate differences	6	3
Balance for the financial year	295	1 626
NB:The totals may include differences due to rounding. Source:Data from the Monitoring Centre.

Table 4

European Monitoring Centre for Drugs and Drug Addiction — Balance sheet at 31 December 2003 and 31 December 2002

(1000 euro)
Assets	2003	2002	Liabilities	2003	2002
Fixed assets			Fixed capital
Intangible fixed assets	94	66	Own capital	3 057	2 797
Buildings	3 559	3 559	Balance for the financial year	295	1 626
Equipment and furniture	157	152
Computer equipment	659	785
Vehicles	50	74
Depreciation	–1 496	–1 867	Subtotal	3 352	4 423
			Current liabilities
Subtotal	3 023	2 768	Automatic carry-overs	1 815	1 377
Stocks	34	28	Non-automatic carry-overs	—	212
			Phare carry-overs	223	—
Current assets			Sundry accounts payable	18	18
Recoverable VAT	94	84	Recovery orders (1)	55	101
Sundry accounts receivable	66	18
Advances	78	—
Subtotal	238	101	Subtotal	2 111	1 709
Cash accounts			Suspense accounts
Bank accounts	2 291	3 474	Sums to be reused	—	265
Imprest account	0	4	Deferred revenue	123	4
			Subtotal	123	269
Subtotal	2 291	3 478
Suspense accounts	0	24
Total	5 586	6 400	Total	5 586	6 400
NB:The totals may include differences due to rounding. Source:Data from the Monitoring Centre. These tables summarise the data provided by the Monitoring Centre in its own accounts.

(1) Recovery orders issued, but not yet collected, that have not yet resulted in the entering of appropriations for reuse.

NB:The totals may include differences due to rounding.

Source:Data from the Monitoring Centre. These tables summarise the data provided by the Monitoring Centre in its own accounts.

THE MONITORING CENTRE'S REPLIES

The combination of responsibilities mentioned by the Court was one of the consequences of the departure of the Head of the Financial Sector. The Head of administration was obliged to take on this role for a transitional period until the new Head of the Financial Sector took up his duties on 1 February 2004. This person, who has become the ex ante verifying officer, does not perform the duties of Authorising Officer.

In accordance with the financial provisions applicable, the instructions in question set out the various procedures of budgetary implementation, the persons in charge of these procedures, and their tasks and responsibilities, including in terms of checking. The procedural stages were described in a circulation sheet, for approval by the persons responsible for their execution, who, in addition, in most cases, have to give, their electronic visa before the file is being sent to the authorizing officer. The EMCDDA has taken note of the Court’s comment, and in order to take better account of the checks made, has prepared checklists to be added to files relating to budgetary operations.

9.	The validation was carried out and submitted to the Court on 27 July 2004.

10.

The budget for 2003 allocated to the activities of the national focal points of the REITOX network was the subject of a parliamentary reservation until the end of April. Therefore, it was not possible to sign the subsidies until very late in the year. Furthermore, the EMCDDA decided not to make advance payments for 2004 until it had examined and closed the cost statements of the 2003. When renewing contracts in the future, the EMCDDA will naturally give due consideration to the real progress achieved in the work requested the year before and to an evaluation of its quality.

11.	Great efforts were taken in May 2004 to identify all EMCDDA assets and to finalise the physical inventory. This exercise and the redefinition of responsibilities and procedures will be completed before the end of 2004.

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