PURPOSE: presentation of the EU Court of
Auditors’ report on the annual accounts of the European
Medicines Agency for the financial year 2012, together with the
Agency’s reply.
CONTENT: in accordance with the tasks conferred on the
Court of Auditors by the Treaty on the Functioning of the European
Union, the Court presents to the European Parliament and to the
Council, in the context of the discharge procedure, a Statement of
Assurance as to the reliability of the annual accounts of each
institution, body or agency of the EU, and the legality and
regularity of the transactions underlying them, on the basis of an
independent external audit.
This audit concerned, amongst others, the annual
accounts of the European Medicines Agency (EMA).
In the Court’s opinion, the Agency’s
Annual Accounts fairly present, in all material respects, its
financial position as of 31 December 2012 and the results of
its operations and its cash flows for the year then ended, in
accordance with the provisions of its financial rules and the
accounting rules adopted by the Commission’s accounting
officer.
The Court also considers that the transactions
underlying the annual accounts of the Agency for the financial
year ended 31 December 2010 are, in all material respects, legal
and regular.
The report confirms that resources made available to
the Agency’s in 2012 amounted to EUR 222.5 million.
The report also makes a series of observations on the
budgetary and financial management of the Agency, accompanied by
the latter’s response. The main observations may be summarised
as follows:
The Court’s observations:
- reliability of the accounts: the Agency noted that it
applies differing recognition criteria for fee revenue and
associated expenditure. This is in contradiction with the matching
principle. It states that it has not yet validated its accounting
system in the area of intangible fixed assets. Given the
considerable investment in the ICT development (2012 investments in
ICT development amounted to EUR 11.6 million), this is a crucial
part of the whole accounting system;
- staff: in 2011 and 2012, the Council refused salary
increases for EU staff. The Commission appealed this decision to
the Court of Justice which did not yet rule on the matter. Since
the Agency is located in London, the salary increases in question
will be paid in GBP whereas the Agency’s accounts are prepared
in Euros. Given the fluctuations in the exchange rate over the
period concerned, the possible back pay to staff would lead to an
estimated exchange rate loss for the Agency of EUR 2.09 million.
The Agency has included this amount in the calculation of its
budgetary outturn account, leading to an equivalent understatement
of funds to be paid back to the Commission;
- legality of the operations: in 2012, the Agency issued
cascading framework contracts for the provision of services. The
procurement procedure presented some irregularities affecting the
principle of transparency;
- budgetary management: the rate of committed
appropriations carried over was high at 27 %, this primarily
relates to the Agency’s planned move to new premises in 2014
(EUR 4 million) and the development of ICT systems (EUR 1.6
million).
The Agency’s response:
- reliability of the accounts: in light of the
Court’s observation the Agency will review its accounting
policy on recognising fee revenue and associated expenditure to
ensure future compliance with the matching principle;
- staff: the Agency states that the amount was included
in the Agency's accounts following an instruction from the
Accounting Officer of the EU Commission that all unrealised
exchange losses should be included in the budgetary accounts as
well as the financial accounts. The Agency expects to need this
money in order to cover the salaries payable in GBP to EMA staff
when the 2011 and 2012 rappels are adopted. The Agency is aware
that DG BUDG considers the ‘rappel’ an unforeseeable
expenditure, but judges this position to be untenable because the
adaptation of exchange rates and weightings which are part of any
‘rappel’ is not only foreseeable, but legally required
and long overdue. For the budgetary accounts the Agency applies the
same methodology used to calculate the provision in the financial
accounts. The Agency's primary concern is that if these figures are
not included in the 2012 budgetary accounts it will find itself
returning funds to the Commission when in fact those funds will be
needed to pay salary liabilities once the weighting and applicable
exchange rates are adapted to real levels;
- legality of operations: the Agency does not share
the view of the Court that the principle of transparency was
infringed in its tender procedure. It stated that it will make
improvements on the issues highlighted by the Court to ensure even
greater transparency in the future;
- budgetary implementation: the Agency noted that it has
already substantially reduced its carry over levels as the
equivalent carry over in 2011 was 33% and 36% in 2010 (27% in
2012). The Agency strives by respecting its operational
requirements to further reduce its carry over to a level within
tolerable margins of the Financial Regulation.
Lastly, the Court of Auditors’ report contains a
summary of the Agency’s activities in 2012. This is
focused on the following:
- applications for marketing authorisations for 96
medicines for human use ;
- pharmacovigilance activities;
- mutual recognition procedures and decentralised
procedures: started 6991; (ended 6709);
- scientific advice finalised;
- applications for paediatric investigation plans: 178
relating to 218 indications;
- applications for marketing authorisations for 13
medicinal products for veterinary use;
- 450 inspections;
- herbal medicinal product studies;
- 197 applications for orphan medicinal products (139
favourable opinions);
- requests for SME status: 684 requests and 361
applications for fee reduction or deferrals.