Post on 24-Feb-2016
description
THE EUROPEAN COURT OF AUDITORS
13/01/2009
PLEASE NOTE
The opinions and views expressed in this presentation are those of the authors and do not necessarily represent those of the European Court of Auditors.
Mission of the European Court of Auditors
The mission of the European Court of Auditors is to audit independently the collection and spending of European Union funds and, by so doing, to evaluate the way in which the European institutions discharge these duties.
The Court examines whether financial operations have been properly recorded, legally and regularly executed and managed with an eye to economy, efficiency and effectiveness.
In this way, the Court aims to contribute to improving the financial management of European Union funds at all levels, so as to ensure maximum value for money for the citizens of the Union.
The Court makes the results of its work known through the publication of relevant, objective and timely reports.
Legislature
European Parliament785 Members
Judiciary
European Court of Justice27 Judges
8 Advocates-General
Executive
European Commission27 Members
LegislatureCouncil of the EU
Ministers from the 27 Member States
External Audit
European Court of Auditors27 Members
Institutions of the EU
The EC (formerly EEC, ECSCand Euratom) cover most ofthe common policy areas, i.e.• competition, single market, Euro, immigration (no direct impact on the budget) • agriculture, research, social policies, development aid
Establishing an area of freedom, security andjustice
• Eurojust • Europol
European Communities Common Foreign and Security Policy
Police and judicial cooperation in criminal matters
THE EUROPEAN UNION
THE THREE PILLARS OF THE EU
THE TREATIES
EU position on armed conflicts, human rights etc. High Representative for the CFSP• strengthening security of the Union• preserving peace• developing and consolidating democracy
July 1975 Treaty of Brussels, creation of theEuropean Court of Auditors (ECA)
October 1977 The ECA becomes operational
February 1992 Treaty of Maastricht, the ECA becomes a Community Institution, introduction of the Statement of Assurance
October 1997 Treaty of Amsterdam, extension of the ECA’s auditing powers to the second and third pillars of the EU and conferment of
right to refer cases to the Court of Justice
February 2001 Treaty of Nice, one Member per Member State, introduction of system of chambers, possibility of issuing specific Statements
of Assurance for individual areas of activity
Historical background
• Court of 27 Members
one Member per Member State appointed for a six-year, renewable
term of office
• President
elected by the Members from amongst their number for a three-year,
renewable term of office
• Secretary-General
appointed by the Court for a six-year, renewable term of office
• Total number of staff in September 2007: 915
Audit sectors: 355, Members’ Private Offices: 160, Administration: 238,
Translation: 162
Structure
PRESIDENCYSupervision of the performance of the Court’s work.
Relations with the Community and other institutions. Legal matters. Internal audit.
AUDIT GROUPSI Preservation and management of natural resourcesII Structural, Transport, Research and Energy policiesIII External actionsIV Own resources, Banking activities, Administrative expenditure,
Community institutions and bodies, Internal policies
CEAD GROUP Coordination, Communication, Evaluation, Assurance and Development
ADMINISTRATIVE COMMITTEE (1 Member per Audit Group)Administrative matters requiring a Court decision
SECRETARIAT-GENERALHuman Resources, IT and Telecommunications, Finance andAdministration, Translation, Court Secretariat
AUDIT COMMITTEE (3 Members and 1 external expert)Court’s internal auditor reports to Audit Committee
The Court‘s role
Article 248(4) of the EC Treaty:
“[The Court] shall assist the European Parliament and the Council in exercising their powers of control over the implementation of the budget.”
• the external auditor of the EU • the Court has no judicial powers
• a collegiate body that draws up reports and delivers opinions... • ... which have no binding force but are of help to those managing EU funds...
The Court‘s tasks
Article 248 of EC Treaty:
• to audit the EU’s accounts (financial statements)
• to examine whether all EU revenue has been received and all EU
expenditure incurred in a lawful and regular manner
• to provide the European Parliament and the Council with a Statement of
Assurance (“DAS”) • to examine whether the financial management has been sound • to deliver opinions
The role of the Members
A Member’s main role is to supervise the specific audit tasks for which he is responsible, i.e. monitor the planning and perfomance of tasks.
• with his colleagues, he lays down Court strategy
• with his colleagues, he decides upon Court reports and opinions
• he represents the Court within the framework of the tasks entrusted to him
• he represents the Court in his home country
Audit field
• The general budget of the European Union (including all borrowing
and lending operations guaranteed by it)
plus:
• European Development Funds (EDFs)
• European agencies and bodies
• European Schools
• European Central Bank
2009 General Budget – RevenueTotal: 133.8 billion euro
1%
17%
65%
17%
Customs duties and agricultural leviesVATGross National Income of EU countriesOther
1% 6%
42%
45%
6%
Sustainable growth (competitiveness, knowledge-based economy, cohesion beween regions)
Natural resources (rural development, fisheries, environment: agricultural expenditure and direct aid)
Citizenship, freedom, security and justice
The EU as a global player
Administration
2009 General Budget – ExpenditureTotal: 133,8 billion euro
Types of audit
• Financial audit: reliability of the accounts
• Financial/compliance audit: legality and regularity of
underlying transactions
• Sound financial management audit or performance
audit: value for money
Financial audit: Reliability of the accounts
• The objective is to obtain sufficient evidence to show that all transactions and all
assets and liabilities have been completely, correctly and accurately
entered in the accounts and presented in the financial statements.
• As the custodian of public funds, the Commission must report accurately on
their use.
• An important element of accountability vis-à-vis the citizens of Europe.
Financial audit: Legality and regularity
• The objective is to obtain sufficient evidence to show that the revenue and
spending operations underlying the EU budget have been carried out in
accordance with contractual and legal requirements and are correctly and
accurately calculated.
Sound financialmanagement auditPerformance audit
• The objective is to obtain sufficient evidence to show that European Union
funds have been used economically, efficiently and effectively, either by
maximising output for a given input or through minimising costs
for a defined objective.
Audit approach
The direct substantive testing audit approach examines transactions directly to
provide an often statistically based conclusion as to their legality and regularity or value
for money;
or..
The systems’ analysis based audit approach examines the effectiveness of the
internal control systems set up to ensure that EU funds are properly spent. If the tests
show that the systems are operating effectively, the amount of direct substantive testing
of transactions can be reduced.
Advantage: this approach may be more efficient: it allows systems’ weaknesses to be
identified and recommendations for improvement to be made.
Audit approach
• Auditing involves obtaining direct evidence on the audit subject. As not
all transactions can be audited every year, statistical sampling is often
used to provide representative evidence.
• When carrying out its audits, the Court pays particular attention to the
internal control systems set up to ensure that EU funds are
properly spent.
• If the tests show that the systems are operating effectively, the amount
of direct substantive testing of transactions can be reduced.
• Weaknesses identified in the systems result in recommendations for
improvement which actively contribute to improving financial
management.
The Court’s audit powers
• Audit of records and on the spot in the European institutions,
Member States’ and beneficiary States’ administrations and
on the premises of final beneficiaries.
• Auditors may request at any time any document considered necessary
for the audit.
Fraud
• Responsibility for preventing or detecting and repressing fraud lies with
those who manage and supervise policy implementation
(i.e. the Commission).
• The Court is not specifically responsible for detecting all cases of fraud. • The Court, as external auditor, audits the arrangements made by
management, including OLAF.
• Normal audit procedures identify fraud indicators. Cases of actual or
suspected fraud are reported to OLAF, which is responsible for follow-up at
EU and Member State level.
Organisation of audit work
Preliminary study
Audit planning memorandum
Contradictory procedurewith the auditee
Multi-annual andannual programming
Published report
Audit field work
PublicationsPublications
• Annual Report: Statement of Assurance, observations on the
implementation of the EU budget and the European Development Funds
• Special Annual Reports: on EU bodies and agencies
• Special Reports: on specific budgetary areas or management topics
• Opinions: on new or amended legislation with financial impact
Impact of the Court’s work
Contributing to improving the financial management
of the European Union:
• Used during the discharge procedure by the European Parliament (given
on the Council’s recommendation)
• The EU institutions make improvements based on the Court’s
recommendations
• The ECA systematically checks whether the appropriate corrective action has
been taken and presents its conclusions in the Annual Report
Liaison with the national Supreme Audit Institutions (SAIs)
• Audits in the Member States are carried out in liaison with the SAIs (or
competent national bodies).
• The Court of Auditors and the SAIs cooperate in a spirit of trust while
maintaining their independence.
• Regular meetings of SAI Presidents (Contact Committee) / working
parties / joint audits, etc.
www.eca.europa.euwww.eca.europa.eu