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PURPOSE: to present the report of the Court of Auditors on the implementation of the budget for the financial year 2010 (Section VIII - European Ombudsman).

CONTENT: this is the Court’s 34th Annual Report on the implementation of the EU budget. It covers the 2010 financial year.

Pursuant to the provisions of the Treaty on the Functioning of the European Union (TFEU) the Court has audited: (a) the annual accounts of the European Union which comprise the consolidated financial statements and the consolidated reports on implementation of the budget for the financial year ended 31 December 2010; and (b) the legality and regularity of the transactions underlying those accounts.

The central part of the annual report is the Court’s statement of assurance (the ‘DAS’) on the reliability of the annual accounts of the EU and on the legality and regularity of transactions (referred to in the report as ‘regularity of transactions’). The statement of assurance itself begins the report; the material which follows reports mainly on the audit work underlying the statement of assurance.

This particular audit concerns the budget implementation of the European Ombudsman.

Based on its audit testing, the ECA concludes that the payments for the policy group Administrative and other expenditure were on the whole free from material error. The estimated error rate was 0.4%.

The Court found that supervisory and control systems for administrative and other expenditure were effective in ensuring the regularity of payments. However, the ECA found a number of errors and weaknesses in the implementation of procurement procedures by the EU institutions and bodies, and in one institution repeated under-utilisation of certain budget lines resulting in significant budget transfers to finance building projects. Recruitment decisions were also not always appropriately documented. These weaknesses were not material for the policy group as a whole, but were significant in the context of the individual institution or body concerned and need to be addressed by their administrations.

For 2010, the ECA recommends the EU institutions and bodies should ensure that:

• appropriate documentation is established to justify recruitment decisions and that eligibility criteria set out in vacancy notices are respected; and
• authorising officers establish appropriate checks and benefit of better guidance in order to improve the design, coordination and performance of procurement procedures.

The Court makes a certain number of particular observations as regards each EU institution or body of the European Union and which do not call into question the overall positive assessments set out above because they do not affect significantly administrative expenses as a whole. However, in the specific case of the audit of the Ombudsman, the Court of Auditors made ​​no specific observation.

PURPOSE: to present the report of the Court of Auditors on the implementation of the budget for the financial year 2010 (Section VI – European Social and Economic Committee).

CONTENT: this is the Court’s 34th Annual Report on the implementation of the EU budget. It covers the 2010 financial year.

Pursuant to the provisions of the Treaty on the Functioning of the European Union (TFEU) the Court has audited: (a) the annual accounts of the European Union which comprise the consolidated financial statements and the consolidated reports on implementation of the budget for the financial year ended 31 December 2010; and (b) the legality and regularity of the transactions underlying those accounts.

The central part of the annual report is the Court’s statement of assurance (the ‘DAS’) on the reliability of the annual accounts of the EU and on the legality and regularity of transactions (referred to in the report as ‘regularity of transactions’). The statement of assurance itself begins the report; the material which follows reports mainly on the audit work underlying the statement of assurance.

This particular audit concerns the budget implementation of the European Social and Economic Committee.

Based on its audit testing, the ECA concludes that the payments for the policy group Administrative and other expenditure were on the whole free from material error. The estimated error rate was 0.4%.

The Court found that supervisory and control systems for administrative and other expenditure were effective in ensuring the regularity of payments. However, the ECA found a number of errors and weaknesses in the implementation of procurement procedures by the EU institutions and bodies, and in one institution repeated under-utilisation of certain budget lines resulting in significant budget transfers to finance building projects. Recruitment decisions were also not always appropriately documented. These weaknesses were not material for the policy group as a whole, but were significant in the context of the individual institution or body concerned and need to be addressed by their administrations.

For 2010, the ECA recommends the EU institutions and bodies should ensure that:

• appropriate documentation is established to justify recruitment decisions and that eligibility criteria set out in vacancy notices are respected; and
• authorising officers establish appropriate checks and benefit of better guidance in order to improve the design, coordination and performance of procurement procedures.

The Court makes a certain number of particular observations as regards each EU institution or body of the European Union and which do not call into question the overall positive assessments set out above because they do not affect significantly administrative expenses as a whole.

In the particular case of the European Social and Economic Committee, the Court notes the following issues:

• reimbursement of travel expenses to Members of the Committee: the rules on the reimbursement of travel costs allow Members of the Committee to choose between Option A, based on actual travel costs incurred on production of the supporting documents, and Option B (60 % of missions performed between January and November 2010), which is the payment of a flat-rate allowance based on the distance in kilometres. Under Option B, the meeting must be held in Brussels and the compensation cannot exceed the standard price of a first-class train or airline ticket determined under Option A. The payment of a flat-rate allowance, under Option B, is generally higher than the actual price of the economy-class train or airline ticket used by beneficiaries most of the time. Reimbursement under Option B can thus generate a payment higher than the actual travel costs incurred. Although legal and regular, this procedure does not correspond to the practice of the other European Institutions and bodies, which is to reimburse travel costs on the basis of actual costs incurred;
• procurement: in one restricted procedure out of the seven procedures examined, the tenderers which had submitted offers in two different lots were not treated equally when submitting clarifications about their offer. In two negotiated procedures, errors and inconsistencies were noted for the drafting of the tender specifications and of the award criteria, the contacts with the tenderers, the evaluation of offers and the formalities for the outcome of the procedure.

PURPOSE: to present the report of the Court of Auditors on the implementation of the budget for the financial year 2010 (Section II – European Council and Council).

CONTENT: this is the Court’s 34th Annual Report on the implementation of the EU budget. It covers the 2010 financial year.

Pursuant to the provisions of the Treaty on the Functioning of the European Union (TFEU) the Court has audited: (a) the annual accounts of the European Union which comprise the consolidated financial statements and the consolidated reports on implementation of the budget for the financial year ended 31 December 2010; and (b) the legality and regularity of the transactions underlying those accounts.

The central part of the annual report is the Court’s statement of assurance (the ‘DAS’) on the reliability of the annual accounts of the EU and on the legality and regularity of transactions (referred to in the report as ‘regularity of transactions’). The statement of assurance itself begins the report; the material which follows reports mainly on the audit work underlying the statement of assurance.

This particular audit concerns the budget implementation of the European Council and the Council.

Based on its audit testing, the ECA concludes that the payments for the policy group Administrative and other expenditure were on the whole free from material error. The estimated error rate was 0.4%.

The Court found that supervisory and control systems for administrative and other expenditure were effective in ensuring the regularity of payments. However, the ECA found a number of errors and weaknesses in the implementation of procurement procedures by the EU institutions and bodies, and in one institution (European Council/Council) repeated under-utilisation of certain budget lines resulting in significant budget transfers to finance building projects. Recruitment decisions were also not always appropriately documented. These weaknesses were not material for the policy group as a whole, but were significant in the context of the individual institution or body concerned and need to be addressed by their administrations.

For 2010, the ECA recommends the EU institutions and bodies should ensure that:

• appropriate documentation is established to justify recruitment decisions and that eligibility criteria set out in vacancy notices are respected; and
• authorising officers establish appropriate checks and benefit of better guidance in order to improve the design, coordination and performance of procurement procedures.

The Court makes a certain number of particular observations as regards each EU institution or body of the European Union and which do not call into question the overall positive assessments set out above because they do not affect significantly administrative expenses as a whole.

In the specific case of the audit of the Council and the European Council, the Council notes the following:

• Financing of the ‘Residence Palace’ building project: the convention for the construction of the Residence Palace Building in Brussels, signed with the Belgian State in 2008 for planned completion in 2013 and for a total estimated cost of 310 million euro (estimated prices 2013), provides for the possibility of making advance payments. In the period 2008-2010, the Council made advance payments totalling 235 million euro, of which 30 million euro were included in the budget line for the acquisition of buildings in the Council’s initial budget. The additional funds of 205 million euro (i.e. 87 % of the total funds paid in advance) came from budgetary transfers made at the end of each year from 2007 to 2010 (mostly from budget lines for interpretation costs and delegations’ travel expenses).
• The repeated under-utilisation of these budget lines throughout the 2008-2010 period and the size of the amounts transferred with respect to total advance payments made does not comply with the principle of budget accuracy. In addition, the payment in the first 3 years of EUR 235 million out of the convention’s total value of EUR 310 million did not match payments to the progress of the building work.

PURPOSE: to present the report of the Court of Auditors on the implementation of the budget for the financial year 2010 (Section VII – Committee of the Regions).

CONTENT: this is the Court’s 34th Annual Report on the implementation of the EU budget. It covers the 2010 financial year.

Pursuant to the provisions of the Treaty on the Functioning of the European Union (TFEU) the Court has audited: (a) the annual accounts of the European Union which comprise the consolidated financial statements and the consolidated reports on implementation of the budget for the financial year ended 31 December 2010; and (b) the legality and regularity of the transactions underlying those accounts.

The central part of the annual report is the Court’s statement of assurance (the ‘DAS’) on the reliability of the annual accounts of the EU and on the legality and regularity of transactions (referred to in the report as ‘regularity of transactions’). The statement of assurance itself begins the report; the material which follows reports mainly on the audit work underlying the statement of assurance.

This particular audit concerns the budget implementation of the Committee of the Regions.

Based on its audit testing, the ECA concludes that the payments for the policy group Administrative and other expenditure were on the whole free from material error. The estimated error rate was 0.4%.

The Court found that supervisory and control systems for administrative and other expenditure were effective in ensuring the regularity of payments. However, the ECA found a number of errors and weaknesses in the implementation of procurement procedures by the EU institutions and bodies, and in one institution repeated under-utilisation of certain budget lines resulting in significant budget transfers to finance building projects. Recruitment decisions were also not always appropriately documented. These weaknesses were not material for the policy group as a whole, but were significant in the context of the individual institution or body concerned and need to be addressed by their administrations.

For 2010, the ECA recommends the EU institutions and bodies should ensure that:

• appropriate documentation is established to justify recruitment decisions and that eligibility criteria set out in vacancy notices are respected; and
• authorising officers establish appropriate checks and benefit of better guidance in order to improve the design, coordination and performance of procurement procedures.

The Court makes a certain number of particular observations as regards each EU institution or body of the European Union and which do not call into question the overall positive assessments set out above because they do not affect significantly administrative expenses as a whole.

In the particular case of the Committee of the Regions, the Court notes the following issues:

• employment of permanent staff: the vacancy notice for the recruitment of one official stipulated as an eligibility criterion that candidates external to the Committee be officials or be on an European Personnel Selection Office (EPSO) successful candidates’ reserve list for a competition of the appropriate grade for the recruitment of officials. The selected candidate was recruited on the basis of an inter-institutional transfer. At that point, he had not formally been appointed as a probationary official in his Institution of origin and his personal file did not include evidence that this transfer was formally endorsed at the appropriate hierarchical level in the Institution of origin.
• procurement: the audit found that, in two negotiated procedures out of four concluded under the provisions of Article 129 of the Implementing Rules, which allows the use of the negotiated procedure for contracts with a value less than or equal to EUR 60 000, the authorising officers did not draw up a formal estimate of the contract value in order to justify the use of the negotiated procedure.

PURPOSE: to present the report of the Court of Auditors on the implementation of the budget for the financial year 2010 (Section VI – European Social and Economic Committee).

CONTENT: this is the Court’s 34th Annual Report on the implementation of the EU budget. It covers the 2010 financial year.

Pursuant to the provisions of the Treaty on the Functioning of the European Union (TFEU) the Court has audited: (a) the annual accounts of the European Union which comprise the consolidated financial statements and the consolidated reports on implementation of the budget for the financial year ended 31 December 2010; and (b) the legality and regularity of the transactions underlying those accounts.

The central part of the annual report is the Court’s statement of assurance (the ‘DAS’) on the reliability of the annual accounts of the EU and on the legality and regularity of transactions (referred to in the report as ‘regularity of transactions’). The statement of assurance itself begins the report; the material which follows reports mainly on the audit work underlying the statement of assurance.

This particular audit concerns the budget implementation of the European Social and Economic Committee.

Based on its audit testing, the ECA concludes that the payments for the policy group Administrative and other expenditure were on the whole free from material error. The estimated error rate was 0.4%.

The Court found that supervisory and control systems for administrative and other expenditure were effective in ensuring the regularity of payments. However, the ECA found a number of errors and weaknesses in the implementation of procurement procedures by the EU institutions and bodies, and in one institution repeated under-utilisation of certain budget lines resulting in significant budget transfers to finance building projects. Recruitment decisions were also not always appropriately documented. These weaknesses were not material for the policy group as a whole, but were significant in the context of the individual institution or body concerned and need to be addressed by their administrations.

For 2010, the ECA recommends the EU institutions and bodies should ensure that:

• appropriate documentation is established to justify recruitment decisions and that eligibility criteria set out in vacancy notices are respected; and
• authorising officers establish appropriate checks and benefit of better guidance in order to improve the design, coordination and performance of procurement procedures.

The Court makes a certain number of particular observations as regards each EU institution or body of the European Union and which do not call into question the overall positive assessments set out above because they do not affect significantly administrative expenses as a whole.

In the particular case of the European Social and Economic Committee, the Court notes the following issues:

• reimbursement of travel expenses to Members of the Committee: the rules on the reimbursement of travel costs allow Members of the Committee to choose between Option A, based on actual travel costs incurred on production of the supporting documents, and Option B (60 % of missions performed between January and November 2010), which is the payment of a flat-rate allowance based on the distance in kilometres. Under Option B, the meeting must be held in Brussels and the compensation cannot exceed the standard price of a first-class train or airline ticket determined under Option A. The payment of a flat-rate allowance, under Option B, is generally higher than the actual price of the economy-class train or airline ticket used by beneficiaries most of the time. Reimbursement under Option B can thus generate a payment higher than the actual travel costs incurred. Although legal and regular, this procedure does not correspond to the practice of the other European Institutions and bodies, which is to reimburse travel costs on the basis of actual costs incurred;
• procurement: in one restricted procedure out of the seven procedures examined, the tenderers which had submitted offers in two different lots were not treated equally when submitting clarifications about their offer. In two negotiated procedures, errors and inconsistencies were noted for the drafting of the tender specifications and of the award criteria, the contacts with the tenderers, the evaluation of offers and the formalities for the outcome of the procedure.

PURPOSE: presentation by the Commission of the consolidated annual accounts of the European Union for the financial year 2010, as part of the 2010 discharge procedure.

Analysis of the accounts of the EU Institutions: Section II - Council.

CONTENT: this Commission document sets out the consolidated annual accounts of the European Union for the financial year 2010 as prepared on the basis of the information presented by the institutions, organisations and bodies of the EU, in accordance with Article 129 (2) of the Financial Regulation applicable to the EU's General Budget, including the Council.

(1) Purpose: the document helps to bring insight into the EU budget mechanism and the way in which the budget has been managed and spent in 2010. It recalls that European Union's operational expenditure covers the various headings of the financial framework and takes different forms, depending on how the money is paid out and managed.

In accordance with the Financial Regulation, the Commission implements the general budget using the following methods: direct centralised management: direct implementation of the budget by the Commission services; indirect centralised management: the Commission confers tasks of implementation of the budget to bodies of EU law or national law, such as the EU agencies of public law or with public service missions; decentralised management: the Commission delegates certain tasks for implementation of the budget to third countries; shared management: under this method of management budget implementation tasks are delegated to Member States. The majority of the expenditure falls under this mode "Shared Management" involving the delegation of tasks to Member States, covering such areas as agricultural spending and Structural Actions.

The document also presents the different financial actors involved in the budget process (accounting officers, internal officers and authorising officers) and recalls their respective roles in the context of the tasks of sound financial management.

Amongst the other legal elements relating to the implementation of the EU budget presented in this document, the paper focuses on the following issues:

• accounting principles applicable to the management of EU spending (business continuity, consistency of accounting methods, comparability of information ...);
• consolidation methods of figures for all major controlled entities (institutions and agencies);
• the recognition of financial assets in the EU (tangible and intangible assets, financial assets and other miscellaneous investments);
• the way in which EU public expenditure is committed and spent, including pre-financing;
• the means of recovery following irregularities detected;
• the modus operandi of the accounting system:
• the audit process followed by the European Parliament's granting of the discharge.

To recall, the final control is the discharge of the budget for a given financial year. The discharge represents the political aspect of the external control of budget implementation and is the decision by which the European Parliament, acting on a Council recommendation, "releases" the Commission from its responsibility for management of a given budget by marking the end of that budget's existence (please refer to the follow-up reports presented in this procedure file).

Lastly, the document presents a series of tables and detailed technical indicators on (i) the balance sheet; (ii) the economic outturn account; (iii) cashflow tables; (iv) technical annexes concerning the financial statements.

(2) Implementation of appropriations under Section II of the budget for the financial year 2010: the document comprises a series of detailed tables, the most important concerning the implementation of the budget. As regards the Council's expenditure, the table on the financial and budgetary implementation of this institution shows the following:

(A) Table showing the commitment appropriations:

• Commitments: EUR 634 million (90.08% rate of implementation)
• Carry-overs to 2011: EUR 29 million (4.14% of authorised appropriations)
• Cancelled: EUR 41 million.

(B) Table showing the implementation of payments:

• Payments: EUR 620 million (82.89% rate of implementation)
• Carry-overs to 2011: EUR 81 million (10.76% of authorised appropriations)
• Cancellations: EUR 41 million.

The annexes detail specific expenditure of the institutions, in particular:

• pensions: an administrative budget heading includes the pension obligations towards the Secretaries General of the Council;
• joint sickness insurance scheme: a valuation is also made for the estimated liability that the EU has regarding its contributions to the Joint Sickness Insurance Scheme in relation to its retired staff. This gross liability has been valued at EUR 3 791 million for 2010;
• buildings: another heading covers the amounts included correspond to amounts committed to be paid during the term of the contracts. Included here is the outstanding contractual obligation of EUR 76 million concerning building related contracts of the Council in 2010.

(3) Budget implementation – conclusions: the main administrative objectives of the General Secretariat of the Council (GSC hereafter) for 2010 were:

• to ensure an efficient start-up and functioning of the European Council and its President;
• further progress on administrative modernisation. The General Secretariat has established an ambitious programme to reinforce the quality of its organisation. Various initiatives have or will have a budgetary impact (in terms of both investment costs and economies resulting from increased efficiency);
• continuation of the construction of the Résidence Palace, which should be ready by 2014;
• adapting its organisation to the creation of the European External Action Service.

For further details on the budgetary implementation of expenditure of Section II of the budget (Council), please refer to the Financial Activity Report 2010 (Section II – European Council and Council).

PURPOSE: presentation of the Court of Auditors’ report on the implementation of the budget concerning the financial year 2010 (Section IX - European Data Protection Supervisor).

CONTENT: the Court of Auditors presents its 34th annual report on the implementation of the budget concerning the financial year 2010.

Pursuant to the provisions of the Treaty on the Functioning of the European Union (TFEU) the Court presents to the European Parliament and to the Council in the framework of the discharge procedure, the statement of assurance (the ‘DAS’) on the reliability of the annual accounts of the EU and on the legality and regularity of transactions underlying those accounts for each institution and organ of the EU, on the basis of an external audit.

This audit included the financial implementation of the European Data Protection Supervisor (EDPS).

Based on its audit work, the Court concludes that the payments as a whole for administrative and other expenditure were free from material error. The most likely rate of error is 0.4 %.

The Court again concludes that the supervisory and control systems for administrative and other expenditure were effective in ensuring the regularity of payments. However, the Court noted a certain number of errors and weaknesses in the implementation of public procurement procedures by the institutions and bodies of the EU. Decisions regarding recruitment were not always correctly recorded. These weaknesses are not significant for all policy groups taken together, but are significant in the context of each institution or body and must be taken into consideration by administrators.

Accordingly, the Court recommends to the institutions and bodies of the EU:

• to ensure that appropriate documentation is established to justify the recruitment decisions made and that eligibility criteria set out in vacancy notices are respected;
• to ensure that authorising officers have appropriate checks and better guidance at their disposal so as to improve the design, coordination and performance of procurement procedures.

The Court makes a certain number of particular observations as regards each EU institution or body of the European Union and which do not call into question the overall positive assessments set out above because they do not affect significantly administrative expenses as a whole.

In the specific case of the EDPS, the Court particularly notes the following points:

• organisation of internal competition : an internal competition in four different fields (legal field with experience in data protection, technological field with experience in data protection, human resources and secretarial assistance) was organised by the European Data Protection Supervisor (EDPS)’s Office in 2009. While the specialised nature of the functions performed by the EDPS’s Office may justify the organisation of an internal competition, this policy should not be considered as the norm. Best practice is to use the services of the European Personnel Selection Office (EPSO), which organises open competitions on a regular basis;
• follow-up on observations in the court of Auditors 2009 annual report: with regard to payment of social allowances to staff members : the 2009 report asked the EDPS to ensure that Staff are requested to deliver at appropriate intervals documents proving their personal situation. In this respect, the European Data Protection Supervisor should improve its system for the timely monitoring and control of these documents. The EDPS has corrected the errors noted in the 2009 DAS and in 2010 and 2011 has implemented tools for better management of the allowances (formal contacts within the EDPS and with the PMO and yearly information fiche).

PURPOSE: presentation of the report of the Court of Auditors on the implementation of the 2010 EU Budget (Section I – European Parliament.

CONTENT: the European Court of Auditors (ECA) published its 34^th annual report on the implementation of the 2010 EU General Budget.

In accordance with the tasks and objectives assigned to it by the Treaty on the Functioning of the EU (TFEU), in the context of the discharge procedure, the Court of Auditors provides, both for the European Parliament and the Council, a statement of assurance (“DAS”) on the reliability of the accounts, as well as the legality and regularity of transactions of each EU institution, body or agency, on the basis of an independent external audit.

This audit also dealt with the European Parliament’s financial implementation.

On the basis of these audits, the Court considers that the payments in the policy group “Administrative and other expenditure” were free from material error. The estimated rate of error is 0.4%.

The ECA found that supervisory and control systems for administrative and other expenditure were effective in ensuring the regularity of payments. However, the ECA found a number of errors and weaknesses in the implementation of procurement procedures by the EU institutions and bodies. Recruitment decisions were also not always appropriately documented. These weaknesses were not material for the policy group as a whole, but were significant in the context of the individual institution or body concerned and need to be addressed by their administrations.

The ECA recommends the EU institutions and bodies should ensure that:

• appropriate documentation is established to justify recruitment decisions and that eligibility criteria set out in vacancy notices are respected; and
• authorising officers establish appropriate checks and benefit of better guidance in order to improve the design, coordination and performance of procurement procedures.

The Court also makes a number of observations in regard to each EU institution or body and do not call into question the overall positive assessments given that they do not have a significant effect on the overall administrative expenditures undertaken.

In the specific case of the audit of the European Parliament, the ECA notes the following points:

• visitors’ groups: the Rules governing the reception of groups of visitors, adopted on 16 December 2002, provide that groups of visitors can be granted subsidies for compensation for travel expenses. The amount is calculated on the basis of the number of visitors and the average return distance the group has to travel, valued at the standard cost of an individual trip by private car. It should not exceed the actual cost of travel. The procedures in place do not require groups to provide evidence of the actual travel costs incurred, resulting in a risk of overpayment as most groups use cheaper collective transport rather than individual means of transport;
• employment of contract agents: an examination of the procedures for recruiting contract staff established that, in four out of the five cases audited, documents evidencing the examination of applications, the performance of interviews and the decision made to select those staff were not on file. Best practice is to ensure that there is full documentation for internal control purposes;
• procurement: in five procurement procedures out of 20, the audit found errors and inconsistencies in the definition and application of award criteria and in the analysis of tender documentation. These cases also evidenced weaknesses in: the drafting of contractual conditions; the authorising officers’ and the evaluation committees’ performance of their respective roles; and the formal communication to the tenderers of the outcome of the procedure ;
• organisation and functioning of political groups: the Parliament’s Internal Rules for the implementation of the budget managed by political groups, adopted by the Bureau on 30 June 2003, provide that the years in which European elections are held (as was the case in 2009) include two distinct budgetary and financial periods. Article 2.1.6 of these Internal Rules states that any unused appropriations exceeding 50 % of those received from the Parliament’s budget for each period shall be paid back to the Parliament. This rule has not been applied and 2 355 955 euro should have been deducted from the appropriations paid to the political groups by the Parliament in 2010 ;
• performance of the ex-ante verification: Article 47 of the Implementing Rules of the Financial Regulation provides that every act implementing the budget must be subject to an ex-ante verification. In the case of payments made to groups of visitors, procurement procedures and payments made under the Parliament’s Internal Rules for the implementation of the budget managed by political groups, the programme for performing ex-ante checks does not include checks tailored to the nature and risk profile of the operations examined. In the case of recruitment procedures, specific checks are applied but do not cover the selection phase. The effectiveness of the ex-ante verification is thus limited.

Follow-up on the observations in the ECA’s 2009 annual report: in regard to the payment of social allowances to staff members, the Court indicated that staff should be requested to deliver at appropriate intervals documents confirming their personal situation. In addition, the Parliament should implement a system for the timely monitoring and control of these documents. Parliament indicated in response that it had implemented measures to mitigate the risk: launching of a campaign to check eligibility for some allowances, which led to the recovery of more than 70 000 euro;

• implementation of an automated control tool (‘electronic fiche’) allowing an annual verification of the staff's personal and administrative data; and
• performance of checks on the establishment of individual entitlements during recruitment procedures or when staff change category.

PURPOSE: presentation of the Court of Auditors’ report on the implementation of the budget concerning the financial year 2010 (Section IX - European Data Protection Supervisor).

CONTENT: the Court of Auditors presents its 34th annual report on the implementation of the budget concerning the financial year 2010.

Pursuant to the provisions of the Treaty on the Functioning of the European Union (TFEU) the Court presents to the European Parliament and to the Council in the framework of the discharge procedure, the statement of assurance (the ‘DAS’) on the reliability of the annual accounts of the EU and on the legality and regularity of transactions underlying those accounts for each institution and organ of the EU, on the basis of an external audit.

This audit included the financial implementation of the European Data Protection Supervisor (EDPS).

Based on its audit work, the Court concludes that the payments as a whole for administrative and other expenditure were free from material error. The most likely rate of error is 0.4 %.

The Court again concludes that the supervisory and control systems for administrative and other expenditure were effective in ensuring the regularity of payments. However, the Court noted a certain number of errors and weaknesses in the implementation of public procurement procedures by the institutions and bodies of the EU. Decisions regarding recruitment were not always correctly recorded. These weaknesses are not significant for all policy groups taken together, but are significant in the context of each institution or body and must be taken into consideration by administrators.

Accordingly, the Court recommends to the institutions and bodies of the EU:

• to ensure that appropriate documentation is established to justify the recruitment decisions made and that eligibility criteria set out in vacancy notices are respected;
• to ensure that authorising officers have appropriate checks and better guidance at their disposal so as to improve the design, coordination and performance of procurement procedures.

The Court makes a certain number of particular observations as regards each EU institution or body of the European Union and which do not call into question the overall positive assessments set out above because they do not affect significantly administrative expenses as a whole.

In the specific case of the EDPS, the Court particularly notes the following points:

• organisation of internal competition : an internal competition in four different fields (legal field with experience in data protection, technological field with experience in data protection, human resources and secretarial assistance) was organised by the European Data Protection Supervisor (EDPS)’s Office in 2009. While the specialised nature of the functions performed by the EDPS’s Office may justify the organisation of an internal competition, this policy should not be considered as the norm. Best practice is to use the services of the European Personnel Selection Office (EPSO), which organises open competitions on a regular basis;
• follow-up on observations in the court of Auditors 2009 annual report: with regard to payment of social allowances to staff members : the 2009 report asked the EDPS to ensure that Staff are requested to deliver at appropriate intervals documents proving their personal situation. In this respect, the European Data Protection Supervisor should improve its system for the timely monitoring and control of these documents. The EDPS has corrected the errors noted in the 2009 DAS and in 2010 and 2011 has implemented tools for better management of the allowances (formal contacts within the EDPS and with the PMO and yearly information fiche).

PURPOSE: to present the report of the Court of Auditors on the implementation of the budget for the financial year 2010 (Section II – European Council and Council).

CONTENT: this is the Court’s 34th Annual Report on the implementation of the EU budget. It covers the 2010 financial year.

Pursuant to the provisions of the Treaty on the Functioning of the European Union (TFEU) the Court has audited: (a) the annual accounts of the European Union which comprise the consolidated financial statements and the consolidated reports on implementation of the budget for the financial year ended 31 December 2010; and (b) the legality and regularity of the transactions underlying those accounts.

The central part of the annual report is the Court’s statement of assurance (the ‘DAS’) on the reliability of the annual accounts of the EU and on the legality and regularity of transactions (referred to in the report as ‘regularity of transactions’). The statement of assurance itself begins the report; the material which follows reports mainly on the audit work underlying the statement of assurance.

This particular audit concerns the budget implementation of the European Council and the Council.

Based on its audit testing, the ECA concludes that the payments for the policy group Administrative and other expenditure were on the whole free from material error. The estimated error rate was 0.4%.

The Court found that supervisory and control systems for administrative and other expenditure were effective in ensuring the regularity of payments. However, the ECA found a number of errors and weaknesses in the implementation of procurement procedures by the EU institutions and bodies, and in one institution (European Council/Council) repeated under-utilisation of certain budget lines resulting in significant budget transfers to finance building projects. Recruitment decisions were also not always appropriately documented. These weaknesses were not material for the policy group as a whole, but were significant in the context of the individual institution or body concerned and need to be addressed by their administrations.

For 2010, the ECA recommends the EU institutions and bodies should ensure that:

• appropriate documentation is established to justify recruitment decisions and that eligibility criteria set out in vacancy notices are respected; and
• authorising officers establish appropriate checks and benefit of better guidance in order to improve the design, coordination and performance of procurement procedures.

The Court makes a certain number of particular observations as regards each EU institution or body of the European Union and which do not call into question the overall positive assessments set out above because they do not affect significantly administrative expenses as a whole.

In the specific case of the audit of the Council and the European Council, the Council notes the following:

• Financing of the ‘Residence Palace’ building project: the convention for the construction of the Residence Palace Building in Brussels, signed with the Belgian State in 2008 for planned completion in 2013 and for a total estimated cost of 310 million euro (estimated prices 2013), provides for the possibility of making advance payments. In the period 2008-2010, the Council made advance payments totalling 235 million euro, of which 30 million euro were included in the budget line for the acquisition of buildings in the Council’s initial budget. The additional funds of 205 million euro (i.e. 87 % of the total funds paid in advance) came from budgetary transfers made at the end of each year from 2007 to 2010 (mostly from budget lines for interpretation costs and delegations’ travel expenses).
• The repeated under-utilisation of these budget lines throughout the 2008-2010 period and the size of the amounts transferred with respect to total advance payments made does not comply with the principle of budget accuracy. In addition, the payment in the first 3 years of EUR 235 million out of the convention’s total value of EUR 310 million did not match payments to the progress of the building work.

PURPOSE: presentation of the report of the Court of Auditors on the implementation of the 2010 EU Budget (Section I – European Parliament.

CONTENT: the European Court of Auditors (ECA) published its 34^th annual report on the implementation of the 2010 EU General Budget.

In accordance with the tasks and objectives assigned to it by the Treaty on the Functioning of the EU (TFEU), in the context of the discharge procedure, the Court of Auditors provides, both for the European Parliament and the Council, a statement of assurance (“DAS”) on the reliability of the accounts, as well as the legality and regularity of transactions of each EU institution, body or agency, on the basis of an independent external audit.

This audit also dealt with the European Parliament’s financial implementation.

On the basis of these audits, the Court considers that the payments in the policy group “Administrative and other expenditure” were free from material error. The estimated rate of error is 0.4%.

The ECA found that supervisory and control systems for administrative and other expenditure were effective in ensuring the regularity of payments. However, the ECA found a number of errors and weaknesses in the implementation of procurement procedures by the EU institutions and bodies. Recruitment decisions were also not always appropriately documented. These weaknesses were not material for the policy group as a whole, but were significant in the context of the individual institution or body concerned and need to be addressed by their administrations.

The ECA recommends the EU institutions and bodies should ensure that:

• appropriate documentation is established to justify recruitment decisions and that eligibility criteria set out in vacancy notices are respected; and
• authorising officers establish appropriate checks and benefit of better guidance in order to improve the design, coordination and performance of procurement procedures.

The Court also makes a number of observations in regard to each EU institution or body and do not call into question the overall positive assessments given that they do not have a significant effect on the overall administrative expenditures undertaken.

In the specific case of the audit of the European Parliament, the ECA notes the following points:

• visitors’ groups: the Rules governing the reception of groups of visitors, adopted on 16 December 2002, provide that groups of visitors can be granted subsidies for compensation for travel expenses. The amount is calculated on the basis of the number of visitors and the average return distance the group has to travel, valued at the standard cost of an individual trip by private car. It should not exceed the actual cost of travel. The procedures in place do not require groups to provide evidence of the actual travel costs incurred, resulting in a risk of overpayment as most groups use cheaper collective transport rather than individual means of transport;
• employment of contract agents: an examination of the procedures for recruiting contract staff established that, in four out of the five cases audited, documents evidencing the examination of applications, the performance of interviews and the decision made to select those staff were not on file. Best practice is to ensure that there is full documentation for internal control purposes;
• procurement: in five procurement procedures out of 20, the audit found errors and inconsistencies in the definition and application of award criteria and in the analysis of tender documentation. These cases also evidenced weaknesses in: the drafting of contractual conditions; the authorising officers’ and the evaluation committees’ performance of their respective roles; and the formal communication to the tenderers of the outcome of the procedure ;
• organisation and functioning of political groups: the Parliament’s Internal Rules for the implementation of the budget managed by political groups, adopted by the Bureau on 30 June 2003, provide that the years in which European elections are held (as was the case in 2009) include two distinct budgetary and financial periods. Article 2.1.6 of these Internal Rules states that any unused appropriations exceeding 50 % of those received from the Parliament’s budget for each period shall be paid back to the Parliament. This rule has not been applied and 2 355 955 euro should have been deducted from the appropriations paid to the political groups by the Parliament in 2010 ;
• performance of the ex-ante verification: Article 47 of the Implementing Rules of the Financial Regulation provides that every act implementing the budget must be subject to an ex-ante verification. In the case of payments made to groups of visitors, procurement procedures and payments made under the Parliament’s Internal Rules for the implementation of the budget managed by political groups, the programme for performing ex-ante checks does not include checks tailored to the nature and risk profile of the operations examined. In the case of recruitment procedures, specific checks are applied but do not cover the selection phase. The effectiveness of the ex-ante verification is thus limited.

Follow-up on the observations in the ECA’s 2009 annual report: in regard to the payment of social allowances to staff members, the Court indicated that staff should be requested to deliver at appropriate intervals documents confirming their personal situation. In addition, the Parliament should implement a system for the timely monitoring and control of these documents. Parliament indicated in response that it had implemented measures to mitigate the risk: launching of a campaign to check eligibility for some allowances, which led to the recovery of more than 70 000 euro;

• implementation of an automated control tool (‘electronic fiche’) allowing an annual verification of the staff's personal and administrative data; and
• performance of checks on the establishment of individual entitlements during recruitment procedures or when staff change category.

PURPOSE: presentation of the Court of Auditors’ report on the implementation of the budget concerning the financial year 2010 (Section IX - European Data Protection Supervisor).

CONTENT: the Court of Auditors presents its 34th annual report on the implementation of the budget concerning the financial year 2010.

Pursuant to the provisions of the Treaty on the Functioning of the European Union (TFEU) the Court presents to the European Parliament and to the Council in the framework of the discharge procedure, the statement of assurance (the ‘DAS’) on the reliability of the annual accounts of the EU and on the legality and regularity of transactions underlying those accounts for each institution and organ of the EU, on the basis of an external audit.

This audit included the financial implementation of the European Data Protection Supervisor (EDPS).

Based on its audit work, the Court concludes that the payments as a whole for administrative and other expenditure were free from material error. The most likely rate of error is 0.4 %.

The Court again concludes that the supervisory and control systems for administrative and other expenditure were effective in ensuring the regularity of payments. However, the Court noted a certain number of errors and weaknesses in the implementation of public procurement procedures by the institutions and bodies of the EU. Decisions regarding recruitment were not always correctly recorded. These weaknesses are not significant for all policy groups taken together, but are significant in the context of each institution or body and must be taken into consideration by administrators.

Accordingly, the Court recommends to the institutions and bodies of the EU:

• to ensure that appropriate documentation is established to justify the recruitment decisions made and that eligibility criteria set out in vacancy notices are respected;
• to ensure that authorising officers have appropriate checks and better guidance at their disposal so as to improve the design, coordination and performance of procurement procedures.

The Court makes a certain number of particular observations as regards each EU institution or body of the European Union and which do not call into question the overall positive assessments set out above because they do not affect significantly administrative expenses as a whole.

In the specific case of the EDPS, the Court particularly notes the following points:

• organisation of internal competition : an internal competition in four different fields (legal field with experience in data protection, technological field with experience in data protection, human resources and secretarial assistance) was organised by the European Data Protection Supervisor (EDPS)’s Office in 2009. While the specialised nature of the functions performed by the EDPS’s Office may justify the organisation of an internal competition, this policy should not be considered as the norm. Best practice is to use the services of the European Personnel Selection Office (EPSO), which organises open competitions on a regular basis;
• follow-up on observations in the court of Auditors 2009 annual report: with regard to payment of social allowances to staff members : the 2009 report asked the EDPS to ensure that Staff are requested to deliver at appropriate intervals documents proving their personal situation. In this respect, the European Data Protection Supervisor should improve its system for the timely monitoring and control of these documents. The EDPS has corrected the errors noted in the 2009 DAS and in 2010 and 2011 has implemented tools for better management of the allowances (formal contacts within the EDPS and with the PMO and yearly information fiche).

PURPOSE: to present the report of the Court of Auditors on the implementation of the budget for the financial year 2010 (Section VII – Committee of the Regions).

CONTENT: this is the Court’s 34th Annual Report on the implementation of the EU budget. It covers the 2010 financial year.

Pursuant to the provisions of the Treaty on the Functioning of the European Union (TFEU) the Court has audited: (a) the annual accounts of the European Union which comprise the consolidated financial statements and the consolidated reports on implementation of the budget for the financial year ended 31 December 2010; and (b) the legality and regularity of the transactions underlying those accounts.

The central part of the annual report is the Court’s statement of assurance (the ‘DAS’) on the reliability of the annual accounts of the EU and on the legality and regularity of transactions (referred to in the report as ‘regularity of transactions’). The statement of assurance itself begins the report; the material which follows reports mainly on the audit work underlying the statement of assurance.

This particular audit concerns the budget implementation of the Committee of the Regions.

Based on its audit testing, the ECA concludes that the payments for the policy group Administrative and other expenditure were on the whole free from material error. The estimated error rate was 0.4%.

The Court found that supervisory and control systems for administrative and other expenditure were effective in ensuring the regularity of payments. However, the ECA found a number of errors and weaknesses in the implementation of procurement procedures by the EU institutions and bodies, and in one institution repeated under-utilisation of certain budget lines resulting in significant budget transfers to finance building projects. Recruitment decisions were also not always appropriately documented. These weaknesses were not material for the policy group as a whole, but were significant in the context of the individual institution or body concerned and need to be addressed by their administrations.

For 2010, the ECA recommends the EU institutions and bodies should ensure that:

• appropriate documentation is established to justify recruitment decisions and that eligibility criteria set out in vacancy notices are respected; and
• authorising officers establish appropriate checks and benefit of better guidance in order to improve the design, coordination and performance of procurement procedures.

The Court makes a certain number of particular observations as regards each EU institution or body of the European Union and which do not call into question the overall positive assessments set out above because they do not affect significantly administrative expenses as a whole.

In the particular case of the Committee of the Regions, the Court notes the following issues:

• employment of permanent staff: the vacancy notice for the recruitment of one official stipulated as an eligibility criterion that candidates external to the Committee be officials or be on an European Personnel Selection Office (EPSO) successful candidates’ reserve list for a competition of the appropriate grade for the recruitment of officials. The selected candidate was recruited on the basis of an inter-institutional transfer. At that point, he had not formally been appointed as a probationary official in his Institution of origin and his personal file did not include evidence that this transfer was formally endorsed at the appropriate hierarchical level in the Institution of origin.
• procurement: the audit found that, in two negotiated procedures out of four concluded under the provisions of Article 129 of the Implementing Rules, which allows the use of the negotiated procedure for contracts with a value less than or equal to EUR 60 000, the authorising officers did not draw up a formal estimate of the contract value in order to justify the use of the negotiated procedure.