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Report on the annual accounts of the European Foundation for the Improvement of Living and Working Conditions for the financial year 2005 together with the Foundation's replies

JO C 312, 19.12.2006, p. 80–85 (ES, CS, DA, DE, ET, EL, EN, FR, IT, LV, LT, HU, MT, NL, PL, PT, SK, SL, FI, SV)

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Official Journal

19.12.2006

Official Journal of the European Union

C 312/80

REPORT

on the annual accounts of the European Foundation for the Improvement of Living and Working Conditions for the financial year 2005 together with the Foundation's replies

(2006/C 312/14)

CONTENTS

1-2	INTRODUCTION

3-6	STATEMENT OF ASSURANCE

7-10	OBSERVATIONS

Tables 1 to 4

The Foundation's replies

INTRODUCTION

The European Foundation for the Improvement of Living and Working Conditions (hereinafter referred to as the Foundation) was set up by Council Regulation (EEC) No 1365/75 of 26 May 1975 (1). Its aim is to contribute to the planning and establishment of better living and working conditions in the European Union by increasing and disseminating knowledge which is relevant to this subject.

2.	Table 1 summarises the Foundation's competences and activities. Key information from the financial statements drawn up by the Foundation for the financial year 2005 is presented in Tables 2, 3 and 4.

STATEMENT OF ASSURANCE

This Statement of Assurance 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 Foundation's accounts, as required by Article 248 of the Treaty establishing the European Community.

The Foundation's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 16 of Regulation (EEC) No 1365/75, and sent to the Court, which is required to provide a statement 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 thus obtained a reasonable basis for the statement below.

Reliability of the accountsThe Foundation's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Foundation's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's statement into question.

OBSERVATIONS

The utilisation rates for the commitment appropriations entered in the budget for the financial year are very high; in addition, the cancellation rate for appropriations carried over is very low. Nevertheless, carry-over rates in respect of commitments for administrative expenditure (Title II) and operating activities (Title III) remain high at 37 % and 44 % respectively.

In 1998, the Foundation recorded a budgetary loss of 2,4 million euro. Inasmuch as the Foundation did not need the appropriations carried over at that time, the Commission did not take these carry-overs into consideration when it paid over the grants. Over time, this loss has been partially offset by the Foundation's various revenues and came to 1 million euro at the end of 2005. In the meantime, the Commission has challenged the necessity of covering a loss due to the non-cancellation of appropriations which, in the end, were not used. The Foundation and the Commission should continue their efforts to clarify this situation.

9.	Achieving the Foundation's objectives should be seen as contributing to the goals laid down in the Foundation's basic regulation. The Foundation's work programme should express this contribution in operational and measurable terms.

10.

There is no comprehensive document analysing the risks arising from the financial and operational aspects of the Foundation's activities. Moreover, there was no validation of the procedures introduced by the Authorising Officers in order to ensure the accuracy and the exhaustivity of the financial information they send to the Accounting Officer, except as regards the data-processing aspects.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

Président

(1) OJ L 139, 30.5.1975, p. 1.

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

(3) These accounts were drawn up on 30 June 2006 and received by the Court on 4 July 2006.

Table 1

European Foundation for the Improvement of Living and Working Conditions (Dublin)

Areas of Community competence deriving from the Treaty

Competences of the Foundation as defined in Council Regulation (EEC) No 1365/75 of 26 May 1975

Governance

Resources available to the Foundation (2004 data)

Products and services provided

‘The Community and the Member States, having in mind fundamental social rights, … shall have as their objectives… improved living and working conditions, … the Community shall support and complement the activities of the Member States in the following fields; … b) working conditions; c) social security and the social protection of workers; d) protection of workers where their employment contract is terminated; e) the information and consultation of workers; f) representation and the collective defence of the interests of workers and employers, including co-determination; g) conditions of employment for third-country nationals; h) the integration of persons excluded from the labour market; i) equality between men and women…’

(Articles 136 and 137 of the Treaty)

Objectives:

The aim of the Foundation shall be to contribute to the establishment of better living and working conditions by increasing and disseminating knowledge which is relevant to this subject. In particular, it is required to consider the following areas:

—	man at work,

—	organisation of work and particularly job design,

—	problems peculiar to certain categories of workers,

—	long-term aspects of the improvement of the environment,

—	the distribution of human activities in space and in time.

Tasks:

—	to foster the exchange of information and experience in these fields,

—	to facilitate contact between universities, study and research institutes, economic and social administrations and organisations,

—	to carry out studies or to conclude study contracts and to provide assistance for pilot projects,

—	to cooperate as closely as possible with existing specialised institutes.

1. Administrative Board

—	from each Member State: one government representative, one representative from employers' organisations and one workers' representative,

—	3 representatives from the Commission.

2. Director appointed by the Commission from a list of candidates submitted by the Administrative Board, he implements the decisions of the Administrative Board and directs the Foundation.

3. The Committee of Experts is composed of 15 members appointed by the Council on a proposal from the Commission, gives opinions in particular on the work programme.

4. External audit

Court of Auditors.

5. Discharge given by the Parliament on a recommendation by the Council.

Final budget 2005:

19,3 million euro (18,1 million euro)

Of which a Community subsidy of: 98,8 % (99,6 %)

Staff in December 2005:

94 (91) posts provided for in the establishment plan, of which 82 (74) were occupied

Other staff: Seconded National Experts and employment agency staff: 12 (16)

Total staff employed: 94 (90)

Operating activities: 54 (53)

Administrative: 33 (32)

Mixed: 7 (5)

Living Conditions:

—	analytical reports on quality of life in Europe,

—	database on age management in companies,

—	reports on labour supply in care services for children and older people,

—	studies on organisation of time over working life.

Working Conditions:

—	European Working Conditions Observatory (EWCO: news articles, survey reports and comparative topic reports),

—	EWCO co-hosted EU presidency conference with Luxembourg government, June 2005,

—	annual review of working conditions in the EU, 2004-2005,

—	fieldwork for 4th European Working Conditions Survey (sample of 30 000 workers in 31 countries).

Industrial Relations:

—	European Industrial Relations Observatory (EIRO),

—	circulation of reports and articles on EIRonline,

—	various reports.

European Monitoring Centre on Change (EMCC):

—	two in-depth sector studies,

—	Various case files,

—	sector future series: seven industry sectors have been covered,

—	organisation of and participation in various seminars.

Transversal Themes:

—	various general and country reports.

Information and communication:

—	the Foundation has organised 71 conferences and taken part in 95 conferences and seminars. Excluding translations, the Foundation has produced 178 publications and circulated 10 newsletters.

Source: Information supplied by the Foundation.

EUROPEAN FOUNDATION FOR THE IMPROVEMENT OF LIVING AND WORKING CONDITIONS

Source: Data supplied by the Foundation — These tables summarise the data provided by the Foundation in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

(1000 euro)
Revenue			Expenditure
Source 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 (current financial year and previous financial year)
Source of revenue	Revenue entered in the final budget for the financial year	Revenue collected	Allocation of expenditure	entered	committed	paid	carried over	cancelled	outstanding commitments	paid	cancelled	appropriations	committed	paid	carried over	cancelled
Community subsidies (1)	19 060	19 060	Title I Staff	8 974	8 971	8 815	157	3	134	127	7	9 108	9 105	8 942	157	10
Other revenue	220	163	Title II Administration	1 382	1 382	875	507	0	503	481	22	1 885	1 885	1 356	507	22
			Title III Operating activities	8 924	8 922	4 967	3 954	2	2 526	2 484	42	11 450	11 448	7 451	3 954	44
Total	19 280	19 223	Total	19 280	19 275	14 657	4 618	5	3 163	3 092	71	22 443	22 438	17 749	4 618	76

Table 3

Revenue and expenditure account for the financial year 2005 (2)

(1000 euro)
	2005
Operating revenue
Community subsidies	18 600
Other subsidies/revenue	366
Total (a)	18 966
Operating expenditure
Staff	8 035
Administration	2 692
Operating activities	8 581
Total (b)	19 308
Operating result (c = a – b)	– 342
Other income (d)	0
Other charges (e)	9
Economic result (f = c + d – e)	– 351

Table 4

Balance sheet at 31 December 2005 and 31 December 2004 (3)

(1000 euro)
	2005	2004
Assets
Fixed assets	2 800	3 121
Receivables	1 044	1 007
Cash	3 244	1 649
Total	7 088	5 777
Liabilities
Cumulative results of previous years	4 444	4 515
Result for the year	– 351	–71
Current liabilities	2 995	1 333
Total	7 088	5 777

(1) Including European Economic Area subsidies.

(2) Data for the financial year 2004 are not shown as they are not comparable with the year 2005 because of the change in the accounting principles applied.

(3) Data for the financial year 2004 have been restated to allow comparison with those for 2005.

THE FOUNDATION'S REPLIES

The Foundation has undertaken considerable efforts in the past to reduce the number of carry-overs. Given the very nature of the Foundation's work, it is, however, a challenge to keep it in balance with the principle of sound financial management, which requires that suppliers not be paid before agreed milestones of the work have been reached.

In 2006, the Foundation and the Commission came to an agreement on the nature and solution of the problem. It is acknowledged by all parties that the Foundation did not at any time spend more money than the amount approved by the Budgetary Authority. The Foundation will gradually reduce the accumulated imbalance to zero within four years.

The Foundation is currently developing two tools in order to set goals that are measurable and to subsequently monitor its performance: a project-management system linked to a financial forecasting software system and a performance-monitoring system, using a balanced scorecard, both to be introduced in 2007.

10.	The Foundation does carry out a risk analysis at both project and unit level, documented in the project plans and annual management plans. It is currently developing a comprehensive risk-management approach at Foundation level.

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