37 Annual accounts of the European Monitoring
Centre on Racism and Xenophobia for 2003
| (26213)
15805/04
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| Court of Auditors Report on the Annual Accounts of the European Monitoring Centre on Racism and Xenophobia for the financial year 2003
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| Legal base | — |
| Deposited in Parliament | 10 December 2004
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| Department | Home Office |
| Basis of consideration | EM of 16 December 2004
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| Previous Committee Report | None
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| To be discussed in Council | Not applicable
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
37.1 The European Monitoring Centre on Racism and Xenophobia (EUMC)
was established in 1997. Its operations are still governed by
Council Regulation (EC) 1035/97, under which it was originally
established. The main task of the Centre is to collect reliable
and comparable data at European level on the phenomena of racism,
xenophobia and anti-Semitism to help the Community and its members
to take account of their effects when they take measures or formulate
courses of action within their respective spheres of competence.
37.2 Under Article 12(10) of Council Regulation 1035/97
the Centre has to forward accounts for its revenue and expenditure
for each financial year to the Commission and the Court of Auditors.
The document
37.3 The document consists of the Court of Auditors'
Report on the annual accounts of the EUMC for the financial year
ended 31 December 2003. The Court concludes that the accounts
are reliable and that the underlying transactions are, taken as
a whole, legal and regular.
37.4 The Court does, however, draw attention to some
areas of concern. These are in particular:
- The award of three contracts
to the same supplier without following the correct procedures.
- The level of appropriations carried over remained
high, although it has been reduced from 40% in 2002 to 36% in
2003.
- A large cancellation of appropriations carried
over at the end of the year. Of those carried over from 2002
to 2003, 20% (€1.5m) were cancelled at the end of the year.
- Violating the principle of budget unity by failing
to amend its budget to include funds received via PHARE (one of
the three pre-accession instruments financed by the EU to assist
the applicant countries of Central and Eastern Europe in their
preparation for joining the EU) for a project to create an information
network for accession countries.
- Failure to establish an efficient system for
managing and monitoring revenue to be collected leading to delays
in the issue of recovery orders and recovery of VAT. For example,
the recovery orders for Austria's reimbursement of rent for the
period May to August 2003 had not been drawn up and VAT of €333,474
paid in 2000 has still not been recovered. Another VAT reimbursement
of around €78,000 had not been included as budget revenue.
- Limited competition between candidates for internal
posts.
37.5 The Court's report also contains the responses
by the EUMC to the Court's criticisms. In summary, these are
as follows:
- First, the EUMC agrees with
the Court's observation on the awards of the three contracts.
As a result, internal controls at the Centre have been reinforced
with the introduction of a procurement helpdesk and additional
training.
- The EUMC has promised to continue
its efforts to reduce the level of appropriations carried over.
However, the Centre believes that the execution of the budget
and implementation of the work programme were again affected adversely
by the low level of payment appropriation available to them during
this period.
- The Centre also agrees with the observation in
respect of the high level of cancellation at the end of the year
of appropriation and has taken appropriate measures to prevent
this reoccurring in future.
- The Centre has included the PHARE project budget
in its amended budget for 2004.
- The EUMC agrees about the need to establish an
efficient system for managing and monitoring revenues to be collected
and has taken measures to improve the controls over the creation
of recovery orders. The outstanding VAT was settled in June 2004.
Regarding the €78,000, it has amended its budget accordingly
and VAT is now analysed on a regular basis.
- Finally, on the issue of limited competition
for internal posts, the Centre notes that internal competitions
are not an infringement of its staff regulations. However, given
the small size of the EUMC, it was decided that internal competitions
will only be held if a certain level of competition is guaranteed.
The Government's view
37.6 In her Explanatory Memorandum of 16 December
2004, the Parliamentary Under-Secretary of State at the Home Office
(Caroline Flint) helpfully summarises the Court of Auditors' main
observations and the EUMC's replies to these. However, the Minister
neither comments on the criticisms made by the Court of Auditors
nor addresses the issue of the adequacy of the Centre's final
responses.
Conclusion
37.7 We are grateful to the Minister for her helpful
summary of the contents of the Report. We were surprised, however,
that the Government chose not to comment on either the Court of
Auditors' criticisms of the European Monitoring Centre or the
Centre's final responses to the report. We would be grateful
if the Minster could do so and, in particular, address the issue
of whether the Auditors' criticisms have been adequately addressed
in the Centre's response.
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