summary of results from the court’s annual audits of the ...€¦ · summary of results from the...

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Summary of results from the Court’s annual audits of the

European Agencies and other bodies for the financial year 2015

2

CH4085661EN02-16PP-CH279-16FIN-RAS-Summary_report_2015-OR.docx 4.10.2016

CONTENTS

Paragraph

INTRODUCTION 1

INFORMATION IN SUPPORT OF THE COURT’S OPINIONS 11

AUDIT RESULTS

Opinions on the reliability of the accounts 15

Opinions on the legality and regularity of the transactions underlying the accounts 17

Other matter - event after balance sheet date 19

Comments made in the SARs 20

Follow-up of previous years’ comments 27

CONCLUSIONS 29

Annex I – Agencies' budget and staff

Annex II – Comments made by the Court, not calling its opinions into question

Annex III – Follow-up of open comments not calling the Court’s opinions into question

3


INTRODUCTION

1. Pursuant to Article 287 of the Treaty on the Functioning of the European Union1

2. This summary provides an overview of the results of these audits. It aims to facilitate the

analysis and comparison of the Court’s Specific Annual Reports (SARs). The Court’s opinions

and comments as well as the replies to them can be found in the respective SARs. This

summary is not an audit report or opinion.

, the

European Court of Auditors (Court) has audited and issued opinions on the reliability of the

accounts and on the legality and regularity of the underlying transactions, for the financial

year ended 31 December 2015 for 41 agencies, offices and bodies (agencies) and the

Europol Pension Fund (EPF).

3. Agencies are highly visible in the Member States and have significant influence on policy

and decision making and programme implementation in areas of vital importance to

European citizens, i.e. health, safety, security, freedom and justice. Depending on their task,

set-up and financing, distinction can be made between decentralised agencies, executive

agencies, self-financed agencies and other bodies.

4. The 30 decentralised agencies play an important role in implementing EU policies,

especially tasks of a technical, scientific, operational and/or regulatory nature. Their aim is to

allow the Commission to concentrate on policy-making and to reinforce cooperation

between the EU and national governments by pooling technical and specialist expertise from

both sides. They are located throughout the EU.

5. The six executive agencies are entrusted with tasks relating to the management of one

or more Union programmes and are set up for fixed periods of time. They are located in

Brussels (five) and Luxembourg (one).

1 OJ C 326, 26.10.2012. p. 1.

4


6. The three self-financed agencies comprise the Office for Harmonization in the Internal

Market (OHIM)2, the Community Plant Variety Office (CPVO) and the Single Resolution Board

(SRB)3

7. The other bodies comprise the European Institute of Innovation and Technology (EIT),

the Euratom Supply Agency (Euratom) and the Europol Pension Fund (EPF). The EIT in

Budapest is an independent, decentralised EU body which pools scientific, business and

education resources to boost the Union's innovation capacity. The Euratom in Luxembourg

was created to support the aims of the European Atomic Energy Community Treaty. The EPF,

which is located in The Hague, was established to finance and pay pensions for staff

employed by the European Police Office (Europol) before it became an agency on

1 January 2010. The EPF has been dissolved as of 1 January 2016.

. The SRB in Brussels became fully operational as of 1 January 2016 with the mission to

ensure the orderly resolution of failing banks, minimising the impact on the real economy

and on public finances.

8. The agencies’ total 2015 budget amounted to some 2,8 billion euro (2014: 2,6 billion

euro) or about 2,0 % of the 2015 EU general budget (2014: 1,9 %). The major part of the

agencies’ budget is funded through the Commission’s subsidies; the rest is income from fees

and other sources.

9. By the end of 2015 the agencies employed 9 965 staff (2014: 9 379)4

10. Details on the agencies, their budgets and staff are provided in Annex 1.

. The number of staff

increased the most in agencies dealing with migration matters (European Asylum Support

Office - EASO) and the prevention of serious crime and terrorism (Europol). The executive

agencies where the staff number went up have an extended mandate and obtained

additional responsibilities.

2 As of 23 March 2016, the Office is called the European Union Intellectual Property Office

(EUIPO).

3 Article 102 of the Financial Regulation of the SRB.

4 Staff includes officials, temporary and contract staff as well as seconded national experts.

5


INFORMATION IN SUPPORT OF THE COURT’S OPINIONS

11. The arrangements for the audit of agencies’ accounts are presented in Table 1

Table 1 - Audit arrangements for agencies’ accounts

.

Agencies Audited by Total

Court Court + audit firm

Decentralised agencies - 30 30

Executive agencies 6 - 6

Self-financed agencies 2 15 3

Other bodies 26 1 3

Total 10 32 42

12. The annual accounts of 32 agencies were verified by an independent external auditor

(audit firm) according to Article 208(4) of the EU Financial Regulation7 and Article 107(1) of

the framework financial Regulation for agencies8

5 The SRB is audited by the Court and an audit firm.

. The Court’s opinions on these accounts

considered the audit work performed by the audit firm and the action taken in response to

their observations. The Court has reviewed the work of the audit firms in accordance with

international audit standards. This review provided adequate assurance for the Court to

base its own audit opinions on the reliability of the accounts using the audit firms’ work.

6 Given the limited resources and operations of the Euratom Supply Agency, it is audited solely by the Court.

7 Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 298, 26.10.2012, p. 1).

8 Article 107 of Commission Delegated Regulation (EU) No 1271/2013 (OJ L 328, 7.12.2013, p. 42).

6


13. For the remaining nine agencies and the EPF, the Court continued to perform the audit

of the reliability of the accounts. The audit work covered compliance with the applicable

accounting rules, completeness and accuracy of balance-sheet and budget figures and an

analysis of the statement of financial performance and of the budget implementation.

14. As in prior years the Court remained exclusively responsible for the audit of the legality

and regularity of the transactions underlying the accounts of all agencies and the EPF. The

audit approach comprised analytical audit procedures, direct testing of transactions and an

assessment of the agencies’ internal controls.

AUDIT RESULTS

Opinions on the reliability of the accounts

15. The final accounts of 40 agencies and the EPF present fairly, in all material respects, their

financial position as at 31 December 2015 and the results of their operations and their cash

flows for the year then ended, in accordance with the provisions of the applicable Financial

Regulations and the accounting rules adopted by the Commission’s Accounting Officer.

16. The Court issued a qualified opinion on the reliability of Frontex’ final accounts for the

financial year 2015. The qualification is based on a material underestimation of accrued

charges by 1,7 million euro.

Opinions on the legality and regularity of the transactions underlying the accounts

17. The Court concluded that for the 40 agencies and the EPF, the transactions underlying

the annual accounts for the year ended 31 December 2015 were legal and regular in all

material respects.

18. The Court issued a qualified opinion on the legality and regularity of the transactions

underlying the EIT’s accounts. The qualification was primarily based on the use of an

irregular flat rate related to grants.

7


Other matter - event after balance sheet date

19. The Court presented an event that took place after balance sheet date in an “Other

matter” paragraph in the SARs of the European Banking Authority (EBA) and of the European

Medicines Agency (EMA), which are both located in London. This paragraph deals with the

United Kingdom (UK) referendum that took place on 23 June 2016 and clarifies that the

accounts and related notes of the two agencies were prepared using the information

available at the date of signing of their accounts when the result of UK citizens’ vote were

not yet known and the formal notification of the triggering of Article 50 of the Treaty on

European Union has not been presented9

Comments made in the SARs

.

20. Without calling its opinions into question, the Court made a total of 90 comments

(2014: 79) affecting 36 agencies and the EPF (2014: 35) to highlight matters of importance

and to indicate room for improvement. The number of comments made under the different

headings of the SARs is shown in Chart 1.

9 The accountants signed the accounts on 24 May 2016 (EBA) and 1 June 2016 (EMA).

8


Chart 1 - Comments by SAR heading

Source: SARs on the agencies annual accounts for the financial year 2015

21. An overview of the comments made for each of the agencies and the EPF is provided

in Annex II

22. The comments considered to be of particular interest are outlined below. They cover

matters of importance which are frequent and/or severe and of wider interest (“lessons to

be learnt”).

.

23. A high level of carry-overs

0

10

20

30

40

50

60

Reliabil ity ofaccounts

Legality/Regularity Internal controls Budgetarymanagement

Other comments

15

7

44

22

1

8 7

54

20

2014

2015

of committed appropriations remains the most frequent

comment and concerns 32 agencies (2014: 28). The carry-overs under title II (administrative

expenditure) of the 22 agencies concerned (2014: 18) on average amounted to 36 % (2014:

39 %) of committed appropriations, carry-overs under title III (operational expenditure) of

the 18 agencies concerned (2014: 18) on average amounted to 48 % (2014:56 %) of

committed appropriations. These carry-overs mainly result from events (partly) beyond the

agencies’ control (e.g. invoices or cost declarations that had not been received by the year

end) or are explained by the multi-annual nature of operations, procurement procedures or

projects. The Court continued to report on these matters following its internally defined

threshold for the different titles of the agencies’ budget. A change of this reporting

9


procedure requires a common understanding of the main parties involved (Court,

Parliament, Council and the agencies) as to what should be reported in the agencies’ SARs

on carry-overs. In this context it would be beneficial to elaborate an agreed upon concept of

a “justified carry-over” and to implement this concept in the agencies.

24. The basic rule underlying public procurement

25.

is to ensure competition between

economic operators. The Court reported in four SARs that agencies had not fully complied

with this rule. It referred to the use going beyond of what can be considered exceptional of a

negotiated procedure without publication of a contract notice and highlighted the absence

of competition in case of the use of framework contracts where the services requested or

individual prices have not been clearly defined.

Business continuity encompasses planning and preparation to ensure the continuation

of operations in case of serious incidents or disasters and the ability to recover to an

operational state within a reasonably short period. The Court found that four agencies do

not yet fully comply with the internal control

26. The agencies’ audited annual accounts comprise the financial statements and the

budgetary implementation reports. The Court reported that the

standard dealing with this matter.

budgetary implementation

reports of three agencies differ from the level of detail

Follow-up of previous years’ comments

provided by most other agencies

which hampers comparison between agencies and affects their informative value. The

Commission has planned to issue guidelines on this matter.

27. The SARs for financial year 2015 provide an overview of follow-up actions taken by the

agencies in response to comments from previous years. Annex III

28. Whilst the overall situation has improved compared to the previous year (number of

open comments decreased) the number of outstanding corrective actions increased by three

shows that for the

134 comments open at the end of 2014 (2013: 153), corrective action was completed in

37 cases during 2015. The corrective actions were ongoing for 44 cases and outstanding for

nine cases. No corrective action was required for 44 comments, mainly in relation to carry-

overs of committed appropriations.

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comments. An outstanding action implies that no action is planned or ongoing. In five of the

nine cases, the implementation of the required corrective actions depends on the

contribution of a third party (e.g. the hosting Member State, a Court or the legislator) and is

beyond the agencies’ control. In three of the remaining four comments, the agencies

concerned (CPVO and EASO) have not yet taken effective action and in one case, the agency

(EIT) does not agree with the Court’s observation and has not planned any further specific

corrective actions.

CONCLUSIONS

29. The Court issued an unqualified opinion on the annual accounts of all agencies except

Frontex. The transactions underlying the agencies’ accounts were legal and regular for all

agencies except for EIT for which the Court has issued a qualified opinion.

30. Agencies further improved their procedures by taking corrective action in response to

the Court’s comments from previous years. Nevertheless, there is still room for

improvement, as indicated by comments made in 2015.

CH4085661EN02-16AA-CH279-16FIN-RAS-Summary_report_2015-OR revws.xlsx 4.10.2016

Agencies' budget and staff (1) Annex I

Agency Parent DG Policy Area 2014 2015 2014 2015(million euro) (million euro) (million euro) (million euro)

Decentralised Agencies

European Medicines Agency – EMA SANTE Health and Consumer Protection 272,0 304,0 752 775

Office for Harmonisation in the Internal Market – OHIM GROW Internal Market 419,6 384,2 928 998

European Aviation Safety Agency – EASA MOVE Mobility and Transport 162,3 185,4 740 779European Agency for the Management of Operational Cooperation at the External Borders – FRONTEX

HOME Home Affairs 86,7 143,3 311 309

European Police Office – EUROPOL HOME Home Affairs 84,0 95,0 574 666

European Food Safety Authority – EFSA SANTE Health and Consumer Protection 79,9 78,8 442 434

European Maritime Safety Agency – EMSA MOVE Mobility and Transport 57,9 64,8 245 246

European Centre for Disease Prevention and Control – ECDC SANTE Health and Consumer Protection 60,5 58,5 277 260

Translation Centre for the Bodies of the EU – CDT DGT Language Services 56,3 49,6 216 218

European Environment Agency - EEA ENV Environment 52,6 49,2 204 198

The European Union s Judicial Cooperation Unit - EUROJUST JUST Justice 34,0 34,0 252 246

European Chemicals Agency – ECHA GROW Enterprise 113,2 115,1 587 572

European Railway Safety Agency – ERA MOVE Mobility and Transport 25,7 26,3 159 157

European Union Agency for Fundamental Rights – FRA JUST Justice 21,5 21,6 110 107

European Banking Authority – EBA FISMAFinancial Services and Capital

Markets 33,6 33,4 146 156

European foundation for improvement of living & working conditions – EUROFOUND EMPL Employment and Social Affairs 21,5 21,2 111 111

European Training Foundation – ETF EAC Education and Culture 22,5 21,0 133 129

European Securities and Markets Authority – ESMA FISMAFinancial Services and Capital

Markets 33,3 36,7 168 186

European Centre for the Development of Vocational Training – CEDEFOP EAC Education and Culture 18,4 18,4 120 123

European Insurance and Occupational Pensions Authority – EIOPA FISMA Financial Services and Capital

Markets 21,6 20,2 129 133

European Monitoring Centre for Drugs and Drug Addiction – EMCDDA HOME Home Affairs 15,7 18,5 101 100

European Agency for Safety and Health at Work – EU-OSHA EMPL Employment and Social Affairs 17,3 16,9 65 65

Community Plant Variety Office – CPVO SANTE Agriculture and Rural

Development14,7 14,7 45 46

European GNSS Agency – GSA GROW Enterprise 403,7 363,8 131 139

European Fisheries Control Agency – EFCA MARE Maritime Affairs & Fisheries 9,2 9,2 58 64

European Institute for Gender equality – EIGE JUST Justice 7,4 7,9 41 42

European Police College – CEPOL HOME Home Affairs 8,9 8,8 43 45

European Network and Information Security Agency – ENISA CNECT Digital Single Market 10,0 10,0 62 69

European Agency for the Cooperation of Energy Regulators – ACER ENER Energy 10,9 11,3 72 80

European Asylum Support Office – EASO HOME Home Affairs 15,6 15,9 79 93

Office of the body of European Regulators for Electronic Communications – BEREC CNECT Digital Single Market 4,2 4,0 27 26

European Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice - EU-LISA

HOME Home Affairs 64,9 71,7 129 134

Single Resolution Board - SRB (4) FISMAFinancial Services and Capital

Markets n/a 22,0 n/a 108

Executive Agencies

Education, Audiovisual and Culture Executive Agency – EACEA EAC & CNECT & HOME & ECHO Education and Culture 46,9 46,9 437 441

Research Executive Agency – REARTD & EAC & GROW & HOME &

CNECT & AGRI Research and Innovation 51,6 54,6 548 618

European Research Council Executive Agency – ERCEA RTD Research and Innovation 36,3 39,6 388 417

Executive Agency for Small and Medium-sized Enterprises - EASME ENTR & RTD & & ENR & ENV &

CLIMA & CNECT & MAREEnergy, Entrepreneurship and

Innovation24,5 36,4 283 373

Innovation and Networks Executive Agency – INEA MOVE & ENER & CNECT & RTD Mobility and Transport 13,4 18,4 151 186

Consumers, Health, Agriculture and Food Executive Agency – CHAFEA SANTE & JUST & AGRI Consumer Protection 7,2 7,4 49 49

Other Bodies

European Institute of Innovation and Technology – EIT EAC Innovation and Technology 174,9 231,7 48 50

Euratom Supply Agency – EURATOM (4) ENER & RTD Energy and Innovation 0,1 0,1 18 17

Europol Pension Fund – EPF HOMEAdministrative Expenditure of

Europoln/a n/a n/a n/a

Total 2 614,5 2 770,5 9 379 9 965

(1) Source: Data provided by the agencies(2) Budet figures are based on payment appropriations(3) Staff includes officials, temporary and contract staff and seconded national experts(4) SRB and EURATOM are not consolidated in the EU accounts

Staff (3)Budget (2)

CH4085661EN02-16BB-CH279-16FIN-RAS-Summary_report_2015-OR.xlsx 4.10.2016

Comments made by the Court, not calling its opinion into question Annex II

Procurement procedures Other Internal control

standards Other High carry-overs

High cancellations of 2014 carry-

overs

Budget implementation Budget funding Other SFM Staff matters Other

1 ACER- Ljubljana 2 XX2 BEREC -Riga 3 X X X3 CdT - Luxembourg 4 X X X X4 CEDEFOP - Thessaloniki 2 X X5 CEPOL - Budapest 2 X X6 CHAFEA - Luxembourg 3 XX X7 CPVO - Angers 4 X X X X8 EACEA - Brussels 1 X9 EASA - Koln 2 XX

10 EASME - Brussels 2 X X11 EASO - Valletta 2 X X12 EBA - London 2 X X13 ECDC - Stockholm 4 X XX X 14 ECHA - Helsinki 2 X X15 EEA - Kobenhavn 1 X16 EFCA - Vigo 1 X17 EFSA - Parma 1 X18 EIGE - Vilnius 1 X19 EIOPA - Frankfurt 1 X20 EIT - Budapest 10 X X X XX XX XXX21 EMA - London 022 EMCDDA - Lisboa 1 X23 EMSA - Lisboa 024 ENISA - Heraklion 2 X X25 EPF - The Hague 1 X26 ERA - Valenciennes 027 ERCEA - Brussels 1 X28 ESMA - Paris 2 XX29 ETF - Torino 030 EU-LISA - Tallinn 5 XX X X X31 EU-OSHA - Bilbao 2 XX32 EURATOM - Luxembourg 1 X33 EUROFOUND - Dublin 1 X34 EUROJUST - The Hague 1 X35 EUROPOL - The Hague 1 X36 FRA - Wien 1 X37 FRONTEX - Warsaw 5 XX XX X38 GSA - Prague 6 X X X X X X39 INEA - Brussels 1 X40 OHIM - Alicante 4 X XX X41 REA - Brussels 042 SRB - Brussels 5 X XX X X

1 4 4 4 3 40 3 2 3 6 9 4 71

Reliability of accountsTotal No of comments

Subtotals: 90Totals: 7 548 20

Internal controls Budgetary management Other commentsLegality/Regularity of transactions

CH4085661EN02-16CC-CH279-16FIN-RAS-Summary_report_2015-OR.xlsx 4.10.2016

Follow-up of open comments not calling the Court’s opinions into question Annex III

Total Completed Ongoing Outstanding N/A

Decentralised Agencies

1 European Medicines Agency – EMA 4 3 1

2 Office for Harmonisation in the Internal Market – OHIM 6 3 2 1

3 European Aviation Safety Agency – EASA 4 1 1 2

4 European Agency for the Management of Operational Cooperation at the External Borders – FRONTEX 8 1 5 1 1

5 European Police Office – EUROPOL 4 1 1 2

6 European Food Safety Authority – EFSA 3 2 1

7 European Maritime Safety Agency – EMSA 1 1

8 European Centre for Disease Prevention and Control – ECDC 2 1 1

9 Translations Centre for the Bodies of the EU – CDT 2 1 1

10 European Environment Agency – EEA 8 3 2 1 2

11 European Body for the Enhancement of Judicial Cooperation – EUROJUST 3 2 1

12 European Chemicals Agency – ECHA 2 1 1

13 European Railway Agency – ERA 4 2 2

14 European Union Agency for Fundamental Rights – FRA 3 1 2

15 European Banking Authority – EBA 2 1 1

16 European foundation for improvement of living & working conditions – EUROFOUND 3 2 1

17 European Training Foundation – ETF 4 1 1 2

18 European Securities and Markets Authority – ESMA 9 3 4 2

19 European Centre for the Development of Vocational Training – CEDEFOP 0

20 European Insurance and Occupational Pensions Authority – EIOPA 2 2

21 European Monitoring Centre for Drugs and Drug Addiction – EMCDDA 1 1

22 European Agency for Safety and Health at Work – EU-OSHA 2 1 1

23 Community Plant Variety Office – CPVO 2 1 1

24 European GNSS Agency – GSA 3 1 2

25 European Fisheries Control Agency – EFCA 0

26 European Institute for Gender equality – EIGE 1 1

27 European Police College – CEPOL 5 1 4

28 European Network and Information Security Agency – ENISA 2 1 1

29 European Agency for the Cooperation of Energy Regulators – ACER 3 1 2

30 European Asylum Support Office – EASO 10 5 2 3

31 Office for the body of European Regulators for Electronic Communications – BEREC 5 3 1 1

32European Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice – EU-LISA

5 1 2 2

Executive Agencies

33 Education, Audovisual and Culture Executive Agency – EACEA 1 1

34 Research Executive Agency – REA 0

35 European Research Council Executive Agency – ERCEA 1 1

36 Executive Agency for Small and Medium-sized Enterprises - EASME (previously EACI) 4 2 2

CH4085661EN02-16CC-CH279-16FIN-RAS-Summary_report_2015-OR.xlsx 4.10.2016

37 Innovation and Networks Executive Agency – INEA (previously TEN-TEA) 1 1

38 Consumers, Health, Agriculture and Food Executive Agency – CHAFEA (previously EAHC) 1 1

Other Bodies

39 European Institute of Innovation and Technology – EIT 12 5 5 1 1

40 Euratom Supply Agency – EURATOM 0

41 Europol Pension Fund – EPF 1 1

134 37 44 9 44Totals

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