5.12.2008 |
EN |
Official Journal of the European Union |
C 311/64 |
REPORT
on the annual accounts of the European Environment Agency for the financial year 2007 together with the Agency's replies
(2008/C 311/10)
CONTENTS
1-2 |
INTRODUCTION |
3-6 |
STATEMENT OF ASSURANCE |
7-10 |
OBSERVATIONS |
Tables 1 to 4
The Agency's replies
INTRODUCTION
1. |
The European Environment Agency (hereinafter called the Agency) was established by Council Regulation (EEC) No 1210/90 of 7 May 1990 (1). It is responsible for setting up an observation network that provides 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. |
Table 1 summarises the Agency's competences and activities. Key data taken from the financial statements drawn up by the Agency for the financial year 2007 are presented in Tables 2, 3 and 4 for information purposes. |
STATEMENT OF ASSURANCE
3. |
This statement 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 Agency's accounts, as required by Article 248 of the Treaty establishing the European Community. |
4. |
The Agency's accounts for the financial year ended 31 December 2007 (3) were drawn up by its Executive Director, pursuant to Article 13 of Regulation (EEC) No 1210/90, and sent to the Court, which is required to give a statement of assurance on their reliability and on the legality and regularity of the underlying transactions. |
5. |
The Court conducted its audit in accordance with the IFAC and ISSAI (4) International Auditing Standards and Codes of Ethics, insofar as these are applicable in the European Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and that the underlying transactions are legal and regular. |
6. |
The Court has thus obtained a reasonable basis for the statement set out below: Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2007 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Agency'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
7. |
The audit of two recruitment procedures showed weaknesses: candidates not fulfilling selection criteria were considered for further evaluation and criteria for identifying the best candidates to be invited for interview were not documented. These situations did not ensure transparent and non-discriminatory procedures. |
8. |
With regard to tendering procedures, the following irregularities were observed in three cases: direct award of services without respecting the requirements of the Financial Regulation (5), award of a specific contract for services not in line with the framework contract terms (6). These weaknesses called into question the transparency of the procedures. |
9. |
Following a call for proposals, the Agency signed grant agreements with consortia of institutions (called European Topic Centres) to annually perform tasks on specific environmental topics (7). The interim and final payments made by the Agency to these Centres are based on declarations of actual costs. The main item of expenditure is personnel costs. The Agency's checks were limited to reviews of the documentation provided by the Centres without adequate procedures in place to ensure the eligibility of the amounts declared. |
10. |
These grant agreements with the Centres also provide for a flat rate of 20 % of direct expenditure for their indirect costs (overheads), whereas the Implementing Rules of the general Financial Regulation limit this rate to 7 %. According to the rules this ceiling can be exceeded only following a reasoned decision; no such decision was taken by the Agency. If the 7 % rate had been applied the amount paid in 2007 would have been 0,3 million euro less. |
This report was adopted by the Court of Auditors in Luxembourg at its meeting of 18 September 2008.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President
(2) OJ L 248, 16.9.2002, p. 1.
(3) These accounts were drawn up on 22 May 2008 and received by the Court on 30 June 2008.
(4) International Federation of Accountants (IFAC) and International Standards of Supreme Audit Institutions (ISSAI).
(5) Two cases with an approximate total value of 26 000 euro.
(6) One case with an approximate value of 215 000 euro.
(7) There are five European Topic Centres and the related commitment appropriations for 2007 were 6 million euro in total.
Table 1
European Environment Agency (Copenhagen)
Areas of Community competence deriving from the Treaty |
Competences of the Agency as defined in Council Regulation (EEC) No 1210/90 |
Governance |
Resources made available to the Agency in 2007 (Data for 2006) |
Main products and services supplied in 2007 |
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Environment policy Community policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Community. It shall be based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay. (…) In preparing its policy (…), the Community shall take account of available scientific and technical data (…). (Article 174 of the Treaty) |
Objectives To set up a European environment information and observation network to provide the Community and the MemberStates with objective, reliable and comparable information at European level enabling them to:
|
Tasks
|
1. Management Board Consisting of:
Tasks To adopt the work programme and ensure it is implemented. 2. Executive Director Appointed by the Management Board on a proposal from the Commission. 3. Advisory Forum Consisting of one representative per MemberState, it advises the Executive Director. 4. Scientific Committee Consisting of qualified figures in the field of the environment. 5. External audit Court of Auditors. 6. Discharge authority Parliament acting on a recommendation by the Council. |
Final budget: 35,1 million euro (37,1 million euro) Community subsidy: 82 % (75 %) Staff numbers at 31 December 2007: Number of posts in the establishment plan: 116 (115) Posts occupied: 111 (110) plus 55 (47) other posts (contract agents and seconded national experts) Total staff numbers: 116 (115) assigned to the following tasks: operational: 73 (72) administrative: 42 (42) mixed: 1 (1) |
|
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Source: Information supplied by the Agency. |
Table 2
European Environment Agency (Copenhagen) — Implementation of the budget for the financial year 2007
(1000 euro) |
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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 previous financial year(s) |
||||||||
entered |
committed |
paid |
carried over |
cancelled |
available |
committed |
paid |
carried over |
cancelled |
||||
Community subsidy |
28 950 |
28 950 |
Title I Staff |
18 050 |
18 022 |
17 814 |
169 |
67 |
308 |
308 |
187 |
0 |
121 |
Other subsidies |
4 857 |
5 007 |
Title II Administration |
2 820 |
2 806 |
2 466 |
338 |
15 |
283 |
283 |
265 |
0 |
18 |
Other revenue |
1 327 |
3 822 |
Title III Operating activities |
12 974 |
12 963 |
8 572 |
4 387 |
16 |
5 290 |
5 290 |
4 881 |
0 |
409 |
Other assigned revenue |
p.m |
348 |
Assigned revenue |
1 290 |
935 |
303 |
987 |
0 |
4 965 |
3 958 |
1 838 |
2 678 |
449 |
Total |
35 134 |
38 127 |
Total |
35 134 |
34 726 |
29 155 |
5 881 |
98 |
10 846 |
9 839 |
7 171 |
2 678 |
997 |
Source: Data supplied by the Agency — This table summarises the data provided by the Agency in its annual accounts. Revenue collected and payments are estimated on a cash basis. |
Table 3
European Environment Agency (Copenhagen) — Economic outturn account for the financial years 2007 and 2006
(1000 euro) |
||
|
2007 |
2006 |
Operating revenue |
||
Community subsidy |
28 950 |
27 650 |
Other subsidies and revenue |
7 753 |
7 951 |
Total (a) |
36 073 |
35 601 |
Operating expenditure |
||
Staff expenditure |
16 483 |
14 500 |
Fixed-asset-related expenditure |
866 |
795 |
Other administrative expenditure |
4 940 |
4 843 |
Operational expenditure |
13 446 |
15 000 |
Total (b) |
35 735 |
35 138 |
Surplus/deficit from operating activities (c = a – b) |
338 |
462 |
Financial operations income (e) |
46 |
72 |
Financial operations expenditure (f) |
–7 |
–7 |
Surplus/(deficit) from non-operating activities (g = e – f) |
39 |
66 |
Economic result for the year (h = c + g) |
377 |
528 |
Source: Data supplied by the Agency — This table summarises the data provided by the Agency in its annual accounts: these accounts are drawn up on an accrual basis. |
Table 4
European Environment Agency (Copenhagen) — Balance sheet at 31 December 2007 and 2006
(1000 euro) |
||
|
2007 |
2006 |
Non-current assets |
||
Intangible fixed assets |
330 |
330 |
Tangible fixed assets |
1 555 |
1 866 |
Long-term receivables |
500 |
494 |
Current assets |
||
Short-term pre-financing |
217 |
1 151 |
Short-term receivables |
2 180 |
2 611 |
Cash and cash equivalents |
7 799 |
6 097 |
Total assets |
12 581 |
12 548 |
Current liabilities |
||
Accounts payable |
7 434 |
7 779 |
Total liabilities |
7 434 |
7 779 |
Net assets |
5 147 |
4 770 |
Reserve |
||
Accumulated surplus/deficit |
4 770 |
4 242 |
Economic result for the year |
377 |
528 |
Net capital |
5 147 |
4 770 |
Source: Data supplied by the Agency — This table summarises the data provided by the Agency in its annual accounts: these accounts are drawn up on an accrual basis. |
THE AGENCY'S REPLIES
7. |
In order to have more candidates in the competition, the Selection Committee chose to also include the candidates that came closest to the criteria in the vacancy notice. The Agency will in the future re-publish the post when a similar situation occurs. The candidates invited for interview fulfilled the selection criteria set out in the notice of competition. The Agency will in future recruitments better document the selection of the short-Iisted candidates. |
8. |
In relation to the direct awards of services: the Authorising Officer approved them due to the significant benefits to be accrued to the Agency. It is considered that there was sufficient documentation of the unique nature of the course on the file to explain the approach taken. The Agency will manage future similar cases fully in line with the Financial Regulation. In relation to the award of a specific contract: it became necessary to further increase the storage and server capacity of the system, for the purpose of good financial management this was done by extending the original order. At the next upgrade of the EEA storage and server system in 2008, the market was consulted again. The Agency will do so for each substantial IT purchase in the future. |
9. |
The Agency has already introduced new procedures for new topic centres in line with the Financial Regulation. Taking note of the Court's observations, these procedures include verification visits to ETC lead organisations and selected partners as well as other detailed checks prior to final payments. Verification visits were made to three lead organisations and one partner in early 2008 in relation to the 2007 subsidies. These new procedures are part of the Agency's continuing efforts to ensure and improve the adequacy and effectiveness of existing controls. |
10. |
The overhead rate was given extended consideration before adoption and was explicitly considered by the Agency in preparing the terms of reference. The Agency considers 20 % to be a reasonable overhead rate. Nevertheless, it is recognised that no ‘reasoned decision’ is in place and one will be put in place through the management board for future calls. |