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Document 52005TA1228(07)

Report on the annual accounts of the European Food Safety Authority for the financial year 2004 together with the Authority's replies

JO C 332, 28.12.2005, p. 45–52 (ES, CS, DA, DE, ET, EL, EN, FR, IT, LV, LT, HU, MT, NL, PL, PT, SK, SL, FI, SV)

Date of document:: 05/10/2005

Author:: Curtea de Conturi Europeană
Form:: Raport

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Tratatul de instituire a Comunităţii Europene

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

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Official Journal

28.12.2005

Official Journal of the European Union

C 332/45

REPORT

on the annual accounts of the European Food Safety Authority for the financial year 2004 together with the Authority's replies

(2005/C 332/07)

CONTENTS

1-2	INTRODUCTION

3-6	THE COURT'S OPINION

7-12	OBSERVATIONS

Tables 1 to 4

The Authority's replies

INTRODUCTION

The European Food Safety Authority (hereinafter called the Authority) was established by Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002 (1). Its main tasks are to supply the scientific information needed for Community legislation to be drawn up, to collect and analyse data that allow risks to be identified and monitored and to provide independent information on these risks. The Authority's competences and activities are summarised in Table 1 on the basis of information supplied by it.

2.	For information, the annual accounts drawn up by the Authority for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

The Court's 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); it was drawn up following an examination of the Authority's accounts, as required by Article 248 of the Treaty establishing the European Community.

The Authority's accounts for the financial year ended 31 December 2004 (3) were drawn up by its Executive Director, pursuant to Article 44 of Regulation (EC) No 178/2002, and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

6.	The Court has obtained a reasonable basis for the opinion expressed below.

Reliability of the accountsThe Authority's accounts for the financial year ended 31 December 2004 are, in all material respects, reliable.Legality and regularity of the underlying transactionsExcept for the situation described in paragraphs 9 to 11, the transactions underlying the Authority's annual accounts, taken as a whole, are legal and regular.

OBSERVATIONS

Valuation of the part of the carry-overs of appropriations that is to be treated as expenditure when calculating the economic outturn for the financial year is based on the declarations of the authorising officers by delegation. These declarations must be drawn up in such a way as to enable the accounting officer to assess the Authority's actual expenses, which has not often been the case.

8.	There are significant weaknesses in the management of fixed assets, in particular as regards the identification of the items to be entered in the inventory (4). Moreover, the methods used to compile the physical inventory are unsatisfactory.

As regards the recruitment of staff, decisions relating to the rejection of applicants are not substantiated and the final reports on the selection procedures are often incomplete or even, in the case of auxiliary staff, non-existent. The computer application used during the first stages of the selection procedure for candidates does not guarantee the integrity of the data recorded. The grading of the staff recruited is often not substantiated or certified by supporting documents.

10.

Auxiliary staff were recruited without a selection procedure. Furthermore, persons who had delivered attestations in favour of certain candidates also acted as members of the selection board for these candidates. Attestations had been delivered in favour of two people stating that they were going to be recruited as temporary staff, although the Appointing Authority had reached no decision in this connection. In one case, a successful candidate who was not appointed was recruited directly to a different post.

11.

One contract was concluded on the basis of two bids, even though the financial regulation stipulates that there should be at least three tenderers for contracts to the value in question (5). In another case, the Chairman of an Evaluation Committee was a former employee of the company which won the contract. The members of this Committee included a direct subordinate of its Chairman. In one last case, a contract was concluded by direct negotiation without any of the conditions laid down by the provisions being observed (6).

12.	The Authority must make every effort to improve the transparency of its decisions on staff recruitment and the award of contracts in order to guarantee observance of the rules in force and to avoid all suspicion of bias.

This Report was adopted by the Court of Auditors in Luxembourg at its meetings of 5 October and 7 December 2005.

For the Court of Auditors

Hubert WEBER

President

(1) OJ L 31, 1.2.2002, p. 1.

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

(3) These accounts were drawn up on 1 August 2005 and received by the Court on 17 August 2005.

(4) Article 103 of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of the Financial Regulation applicable to the general budget (OJ L 357, 31.12.2002, p. 1).

(5) Amount: 8 400 euro. Article 129(2) of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of the Financial Regulation applicable to the general budget (OJ L 357, 31.12.2002).

(6) Article 126 of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of the Financial Regulation applicable to the general budget (OJ L 357, 31.12.2002).

Table 1

European Food Safety Authority (Parma)

Areas of competence deriving from the Treaty

Competences of the Authority

(Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002)

Governance

Resources made available to the Authority in 2004

(2003 data)

Products and services supplied in 2004

Free movement of goods (Article 37 of the Treaty)

Contribution to a high level of protection of health, safety and protection of the environment and of consumers, taking account of any new development based on scientific facts (Article 95 of the Treaty)

Common trade policy (Article 133 of the Treaty)

Public health (Article 152(4)(b) of the Treaty)

Objectives

—	To provide scientific opinions and scientific and technical support for the Community's legislation and policies which have a direct or indirect impact on food and feed safety;

—	to provide independent information on risks relating to food safety;

—	to contribute to the achievement of a high level of protection of human life and health;

—	to collect and analyse data needed to allow characterisation and monitoring of risks.

Tasks

—	To issue scientific opinions and studies;

—	to promote uniform risk assessment methodologies;

—	to assist the Commission;

—	to search for, analyse and summarise the requisite scientific and technical data;

—	to identify and characterise emerging risks;

—	to establish a network of organisations operating in similar fields;

—	to provide scientific and technical assistance in crisis management;

—	to improve international cooperation;

—	to provide the public and interested parties with reliable, objective and easily comprehensible information;

—	to take part in the Commission's rapid alert system.

1. Management Board

Composition

14 members appointed by the Council (in cooperation with the European Parliament and the Commission) and one representative of the Commission.

Duties

To adopt the work programme and the budget and ensure that they are implemented.

2. Executive Director

Appointed by the Management Board on the basis of a list of candidates proposed by the Commission, following a hearing before the European Parliament.

3. Advisory Forum

Composition

One representative per Member State.

Duties

To advise the Executive Director.

4. Scientific Committee and scientific panels

To draw up the Authority's scientific opinions.

5. External audit

European Court of Auditors.

6. Discharge authority

Parliament, on the Council's recommendation.

Final budget:

29,1 million euro (12,6 million euro)

Community contribution: 100 % (100 %)

Staff numbers as at 31 December 2004:

Number of posts in establishment plan: 138 (49)

Posts occupied: 102 (27)

+ 37 (36) other staff (auxiliary contracts, seconded national experts, local staff, employment agency staff)

Total staff: 139 (63)

Assigned to the following duties:

—	operational: 83 (33)

—	administrative: 56 (30)

158 opinions were adopted and published in 2004. They covered many areas including aromatic plants, genetically modified organisms (with the WHO), bovine spongiform encephalopathy (BSE) or transmissible spongiform encephalopathy (TSE).

Two scientific symposia on specific topics, the development of scientific expertise within the Authority, the identification of emerging risks and the placing on the network and gathering of scientific data were organised.

The Advisory Forum met four times with a view to working as a network with the national authorities on specific topics such as coordination in the event of a crisis scenario.

Source: Information supplied by the Authority.

Table 2

European Food Safety Authority — Implementation of the budget for the financial year 2004

(1000 euro)
Revenue			Expenditure
Origin of revenue	Revenue entered in the final budget for the financial year	Revenue collected	Allocation of expenditure	Final budget appropriations					Appropriations carried over from the previous financial year			Available appropriations (2003 budget and carry-over from financial year 2002)
Origin of revenue	Revenue entered in the final budget for the financial year	Revenue collected	Allocation of expenditure	entered	committed	paid	carried over (1)	cancelled	entered	paid	cancelled	entered	committed	paid	carried over	cancelled
Community subsidies	29 092	18 000	Title I Staff	11 509	8 641	8 251	390	2 868	149	140	9	11 658	8 790	8 391	390	2 876
Other subsidies	0	0	Title II Administration	5 633	5 094	3 617	1 477	539	1 189	1 058	130	6 822	6 283	4 676	1 477	669
Other revenue	0	0	Title III Operating activities	11 950	7 517	4 051	3 818	4 081	2 894	2 019	875	14 844	10 411	6 071	3 818	4 956
Total	29 092	18 000	Total	29 092	21 252	15 919	5 684	7 488	4 233	3 219	1 014	33 325	25 485	19 139	5 684	8 502
NB: Variations in totals are due to the effects of rounding. Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts.

Table 3

European Food Safety Authority — Revenue and expenditure account for the financial years 2004 and 2003

(1000 euro)
	2004	2003 (2)
Operating revenue	20 591	10 171
Total operating revenue	20 591	10 171
Administrative expenditure
Staff expenditure	–7 564	–3 213
Buildings and related expenditure	–4 192	– 781
Other expenditure	–1 263	– 536
Depreciation and reduction in value of consolidated entities	– 333	– 204
Operating expenditure	–6 431	–2 159
Total operating expenditure	–19 783	–6 894
Operating profit/loss	808	3 277
Revenue from financial operations	0	1
Expenditure from financial operations	–7	–3
Profit/(loss) on financial operations	–6	–2
Current profit/loss	802	3 275
Extraordinary revenue		402
Extraordinary expenditure	–27
Extraordinary profit/loss	–27	402
Economic outturn for the financial year	775	3 677
NB: Variations in totals are due to the effects of rounding. Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts.

Table 4

European Food Safety Authority — Balance sheet at 31 December 2004 and at 31 December 2003

(1000 euro)
Assets	2004	2003	Liabilities	2004	2003 (3)
A. Fixed assets			A. Own capital
Intangible assets			Balance carried over	3 677
Computer programmes	423	362	Economic outturn for the financial year	775	3 677
Tangible assets			Total	4 452	3 677
Computer equipment	1 035	701	C. Liabilities
Furniture and mobile equipment	151	106	Liabilities of a maximum of one year
Depreciation	– 537	– 204	Salary liabilities	13	8
			Fiscal and social liabilities	77
Total	1 071	965	Consolidated Entities (CE) (4)	2 069	146
B. Current assets			Expenditure to be allocated and revenue to be carried over	2 686	1 535
Stocks
Receivables of a maximum of one year
Advance financing	323
Staff	50
Current receivables	1	1
Other receivables	36	40
Consolidated Entities (CE) (4)	4 568
Expenditure to be carried over and revenue accrued	47	2
Available assets
Bank accounts	3 202	4 342
Imprest accounts		15
Total	8 226	4 400	Total	4 845	1 688
Total assets	9 297	5 365	Total liabilities	9 297	5 365
NB: Variations in totals are due to the effects of rounding. Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts.

(1) Including non-automatic carry-overs of appropriations (see Management Board Decision of 18 January 2005).

NB: Variations in totals are due to the effects of rounding.

Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts.

(2) The data for the financial year 2003 have been restated to make them comply with the principle of accruals-based accounting.

NB: Variations in totals are due to the effects of rounding.

Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts.

(3) The data for the financial year 2003 have been restated to make them comply with the principle of accruals-based accounting.

(4) Community institutions and bodies.

NB: Variations in totals are due to the effects of rounding.

Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts.

THE AUTHORITY'S REPLIES

7.	The Authority will ensure that the system implemented, intended to inform the accountanting officer of expenditure for the financial year, is more accurate and reliable.

8.	The Authority will carry out a full check of its inventory in November 2005, once the move to Parma is complete. The method used involves entering goods in the inventory as soon as they are received or, at the latest, at the time of payment of the goods.

Selection procedures have been strengthened in order to improve their transparency, as well as that of the recruitment decisions. The shortcomings observed by the Court were due to the speed with which the Authority had to be set up. The computer application referred to by the Court is now only used as a database.

10.

Since September 2004 a simplified selection procedure has been organised for the recruitment of auxiliary staff. Members of the selection board are obliged to state if a candidate is known to them at the time of the interviews for selection. The Authority is examining measures to minimise the risk of bias in selection boards. An attestation of recruitment as temporary staff was issued for two successful candidates for posts to be filled once the budget allowed it, namely six months later.

11.

In order to adhere more closely to the rules governing the award of contracts, the Authority has taken various measures and has set up an internal network aimed at improving understanding of the rules in force and at training the relevant staff. As regards the cases described by the Court, the composition of Evaluation Committees is determined by EFSA in accordance with the general principles in use and depending on the number of people able to carry out a technical evaluation, which is limited in a small institution such as ours. The conclusion of a contract by direct negotiation was due to a complication in planning. Since then, the service has been the subject of a procurement procedure.

12.	The Authority has always sought to comply with the rules in force and will contine its efforts in terms of equal treatment and transparency in both its recruitment and public procurement policy.

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