PURPOSE: to
present the report by the Court of Auditors on the 2008 annual accounts of
the European Police College (CEPOL).
CONTENT: in
the Court’s opinion, the College’s Annual Accounts present fairly, in all
material respects, its financial position as of 31 December 2008 and the
results of its operations and its cash flows for the year then ended.
Without
calling into question this opinion, the Court notes that difficulties
experienced in 2008 in migrating the old accounting system to ABAC and the
late implementation of a proper accounting system still put at risk the
quality of the financial information concerning the carry-overs from the
previous year, the use of assigned revenue and the link with certain figures
in the balance sheet for 2007.
In addition,
the Court sets out the basis for qualified opinion
on the legality and the regularity of the transactions underlying the
accounts:
- the
College directly contracted consulting services with a provider on the
basis of a framework contract of the Commission exclusively intended for
training services. This procurement procedure is irregular;
- expenditure
for the organisation of courses and seminars represent a significant
part of the College’s budget. The audit of such expenditure revealed a
high number of breaches of the applicable administrative and
financial rules such as the absence of justifications of the costs
incurred, the absence of confirmation of attendance, original invoices
and documents necessary for the reimbursement of accommodation, travel
costs for experts not queried etc;
- for
a sample of 15 commitments, the audit showed the absence of: (i) legal
commitment in three cases, (ii) budgetary commitment before the legal
commitment in nine cases.
The Court of
Auditor’s report includes a detailed section on the College’s expenditure and
an analysis of the expenditure, as well as the College’s replies.
- The
Court’s analysis of the accounts: as regards
financial and budgetary management, the Court makes a number of comments
such as: (i) more than EUR 2.7 million of the 2008 payment
appropriations had to be carried forward. This situation is against the
principle of annuality and indicates weaknesses in the programming and
the monitoring of the implementation of the budget; (ii) during 2008 a commitment of EUR 175 000 was made in relation to a recovery order made by the European
Commission in respect of an advance payment made before 2006 to the
College’s predecessor. The commitment was carried forward to 2009; (iii)
the audit of a sample of commitments showed that, in three cases, there
was no audit trail to retrace the financial execution such that it was
not possible to match their closing balances in the accounts; (iv) the
College closed its old accounting system and migrated to ABAC. The
migration to the new system effectively started on 14 July 2008. In the meantime, a manual system was set up. Not all the adjustments related to the period
covered by the manual system were effected on time; (v) inventory of
assets: two fixed assets management systems are in place, sometimes
duplicating the recording of assets. No labels and no unique inventory
numbers are used; (vi) in its report concerning the 2007 financial year,
the Court had noted cases where appropriations were used to finance
private expenditure. The College replied that an ex-post control would
be carried out by an external company. Such a control had not been
launched mid-2009.
- The
Agency’s replies: the
College takes note of the observations of the Court: (i) it has taken
all the necessary measures to minimise the risks linked to the migration
to the ABAC system. The commitment system implemented in 2008 is closely
monitored and improved to avoid error; (ii) monitoring and control
systems already in place and will continue to be improved and
implemented in order to avoid such situations in the future; (iii) the
College notes the observation on the commitment system. The ex-ante
controls on transactions have been reinforced in 2009 to avoid such situations
in the future. The College notes that measures have been taken to
improve the monitoring of operational expenditure to avoid committing
significant funds at the year-end and to avoid excessive carry-over;
(iv) the College recognises that they were inconsistencies concerning
the three commitments mentioned by the Court. The total error amounts to
EUR 1 169 to be compared to a total value of EUR 318 210 of the 15
commitments sample; (v) as regards inventories, the College has in 2009
implemented ABAC assets and has drafted an inventory policy which is
under review for approval in view of a proper registering and accounting
of the inventory; (vi) lastly, the final part of the recovery process
regarding personal expenditure in 2007 was completed in June 2009,
except for the seconded national experts who left the College the
previous years. When the recovery is fully completed an ex-post control,
will be carried out following a tender process.