Report on the financial statements of the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA - Lisbon) for the financial year ended 31 December 1998, together with the Monitoring Centre's replies
C 372/44 EN Official Journal of the European Communities 22. 12. 1999 on the financial statements of the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA-Lisbon) for the financial year ended 31 December 1998, together with the Monitoring Centreís replies REPORT (1999/C 372/08) CONTENTS Paragraph reference THE COURT S OPINION. 1-4 MAIN OBSERVATIONS ON THE IMPLEMENTATION OF THE BUDGET OF THE MONITORING CENTRE FOR DRUGS AND DRUG ADDICTION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 1998. Budgetary accounts and appropriations carried over. Contracts/national focal points of the network (Reitox). Imprest accounts. Publication of budget. 5-9 5-6 7 8 9 Tables 1 and 2. The Monitoring Centreís replies. Page 45 45 45 45 45 45 47 49 22. 12. 1999 EN Official Journal of the European Communities C 372/45 THE COURT S OPINION (Excel) during 1998. The new SI 2 system is to be introduced as of the financial year 1999. The general accounts will continue to be kept by means of the Cubic software. 1. This report is addressed to the Management Board of the European Monitoring Centre for Drugs and Drug Addiction in conformity with Article 11(11) of Council Regulation (EEC) No 302/93 (1). 2. The Court has examined the financial statements of the Euro- pean Monitoring Centre for Drugs and Drug Addiction for the financial year ended 31 December 1998. In accordance with Article 11(8) of Regulation (EEC) No 302/93, the budget was implemented under the responsibility of the Director. This respon- sibility included the drawing-up and presentation of the financial statements (2) in accordance with the internal financial provisions, as provided for in Article 11(12) of Regulation (EEC) No 302/93, as modified by Article 1 of Regulation (EC) No 3294/94 (3). The Court of Auditors is required under Article 248 of the Treaty establishing the European Community to examine these accounts. 3. The Court performed its audit in accordance with its auditing policies and standards. These have been adapted from generally accepted international auditing standards to reflect the specific characteristics of the Community context. Accordingly, the Court carried out such tests of the accounting records and other audit- ing procedures as it deemed necessary in the circumstances. By means of this audit, the Court obtained a reasonable basis for the opinion expressed below. 6. ECU 2,4 million in appropriations was carried forward from 1998 to 1999 (25 % of the Monitoring Centreís final budget). They mainly concerned Title III of the budget: ECU 0,4 million was for consultations, studies, surveys and training, ECU 0,2 mil- lion regarded publications of a general character and ECU 0,6 mil- lion concerned direct support for the focal points. The main rea- son for these carry-overs was the budgetary authorityís delay in freeing the reserve of ECU 2 million. Contracts/national focal points of the network (Reitox) 7. Many of the contracts had been allocated by private treaty or restricted invitation to tender. Because of the delay in launching the procedures, the contracts for 14 specific Reitox measures (out of the 20 undertaken during 1998) were signed during the last two months of the financial year. 4. This examination has enabled the Court to obtain reasonable assurance that the annual accounts for the financial year ended on 31 December 1998 are reliable and that the underlying transac- tions, taken as a whole, are legal and regular. Imprest accounts MAIN OBSERVATIONS ON THE IMPLEMENTATION OF THE BUDGET OF THE EUROPEAN MONITORING CENTRE FOR DRUGS AND DRUG ADDICTION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 1998 Budgetary accounts and appropriations carried forward 8. The Centre continued to carry out a significant part of its expenditure via an imprest account. Thus, 22 % of the payments for the financial year were carried out by imprest account (ECU 1,6 million out of ECU 7,2 million). The Court once again recom- mends that the Centre should wind down its use of imprest accounts. 5. Due to delays in the introduction of the SI 2 system, the bud- getary accounts continued to be kept by means of a spreadsheet Publication of the budget (1) OJ L 36, 12. 2. 1993, p. 1. (2) As required under Article 11(10) of Council Regulation (EEC) No 302/93, the accounts for all the Monitoring Centreís revenue and expenditure for the financial year 1998 were drawn up on 26 May 1999 and forwarded to the Centreís Management Board, the Commis- sion and the Court of Auditors. These accounts were received by the Court on 31 May 1999. A summarised version of these accounts is presented in the tables attached to this report. (3) OJ L 341, 30. 12. 1994, p. 7. 9. In breach of the requirement laid down in Article 13 of its Financial Regulation, the Centre did not publish either its budget or organisation chart in the Official Journal of the European Com- munities. C 372/46 EN Official Journal of the European Communities 22. 12. 1999 This report was adopted by the Court of Auditors in Luxembourg at the Court meeting of 22 and 23 September 1999. For the Court of Auditors Jan O. KARLSSON President 22. 12. 1999 EN Official Journal of the European Communities C 372/47 Table 1 Balance sheet for the financial years 1998 and 1997 Assets 1998 1997 Liabilities 1998 1997 (ECU 1 000) Fixed assets 3 518 3 409 Stocks Office equipment Current assets Commission subsidy Sundry debtors Payments on specific subsidies (2) VAT to be recovered Cash accounts Bank Imprest account Transfers in progress Cash accounts 29 570 403 10 4 987 3 230 527 - 47 0 3 710 12 2 668 207 172 3 047 1 209 800 - 1 820 1 190 Subtotal Subtotal Fixed capital Own capital (1) Balance for the financial year 3 547 1 287 3 421 - 1 569 Subtotal 4 834 1 852 Current liabilities Commission Non-automatic carry-overs of appropriations Automatic carry-overs of appropriations Sundry accounts due VAT VAT reuse accounts 570 280 2 112 405 4 39 Subtotal 3 410 2 668 1 930 21 172 15 4 806 Total assets 8 244 6 658 Total liabilities 8 244 6 658 (1) The amount corresponds to that of fixed assets and stocks excluding the refurbishing of the building (about ECU 1 million). (2) Appropriations allocated on the basis of specific subsidies (various seminars). Source: Prepared by the Court of Auditors on the basis of the Monitoring Centreís data. C 372/48 EN Official Journal of the European Communities 22. 12. 1999 Revenue and expenditure account for the financial years 1998 and 1997 Table 2 (ECU 1 000) 1998 1997 Revenue Commission subsidy Miscellaneous revenue Bank interest Expenditure Staff - Title I Payments Appropriations carried forward Total revenue Buildings, equipment and sundry operating expenditure - Title II Payments Appropriations carried forward Operating expenditure - Title III Payments Appropriations carried forward Non-automatic carry-overs Out-turn for the financial year Balance carried over from the previous year Adjustment to out-turn from previous year (1) Appropriations carried forward and cancelled Exchange-rate differences Total expenditure 9 695 154 123 9 972 2 751 138 805 430 1 305 1 544 280 7 253 2 719 - 1 569 0 137 0 3 632 90 3 722 2 517 6 884 43 829 1 881 6 160 - 2 438 885 - 81 92 - 27 (1) Amount included in the subsidies to be received under the financial year 1997 but not subsequently collected. Source: Prepared by the Court of Auditors on the basis of the Monitoring Centreís data. Balance for the financial year 1 287 - 1 569 22. 12. 1999 EN Official Journal of the European Communities C 372/49 REPLIES FROM THE EMCDDA Points 1 to 4 The EMCDDA welcomes the Court of Auditorsí observation that the annual accounts for the financial year ended 31 December 1998 are reliable and that the underlying transactions, taken as a whole, are legal and regular. The timetable for the signature of contracts for the specific Reitox projects was conditioned notably by the late lifting of the ECU 2 000 000 reserve placed on the EMCDDAís budget for 1998 by the European Parliament. Point 5 Point 8 The EMCDDA introduced the SI 2 system in January 1999, at the same time as the European Commission, as soon as it was made available to the EMCDDA following its adaptation to the agencies. The EMCDDA supports the Court of Auditorsí recommendation that the use of imprest accounts should be progressively wound down. Point 6 No comments on this point. Point 7 Of the EMCDDAís contracts 26 % were allocated by private treaty and 55 % by restricted invitations to tender following calls for expression of interest, in accordance, in all cases, with the legisla- tion applicable to the EMCDDA. Point 9 In order to minimise publication costs, the EMCDDA had requested the Court of Auditorsí opinion on a possible amendment to its Financial Regulation to replace the publication in the Official Jour- nal of the European Communities by an electronic publication via the Monitoring Centreís Internet site. Following the Court of Audi- torsí negative reply of 24 March 1999, the procedure for publica- tion in the Official Journal of the European Communities was launched, while maintaining the electronic publication via the Internet