Report on the annual accounts of the European Chemicals Agency for the financial year 2009
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1 ЕВРОПЕЙСКА СМЕТНА ПАЛАТА TRIBUNAL DE CUENTAS EUROPEO EVROPSKÝ ÚČETNÍ DVŮR DEN EUROPÆISKE REVISIONSRET EUROPÄISCHER RECHNUNGSHOF EUROOPA KONTROLLIKODA ΕΥΡΩΠΑΪΚΟ ΕΛΕΓΚΤΙΚΟ ΣΥΝΕΔΡΙO EUROPEAN COURT OF AUDITORS COUR DES COMPTES EUROPÉENNE CÚIRT INIÚCHÓIRÍ NA HEORPA CORTE DEI CONTI EUROPEA EIROPAS REVĪZIJAS PALĀTA EUROPOS AUDITO RŪMAI EURÓPAI SZÁMVEVŐSZÉK IL-QORTI EWROPEA TAL-AWDITURI EUROPESE REKENKAMER EUROPEJSKI TRYBUNAŁ OBRACHUNKOWY TRIBUNAL DE CONTAS EUROPEU CURTEA DE CONTURI EUROPEANĂ EURÓPSKY DVOR AUDÍTOROV EVROPSKO RAČUNSKO SODIŠČE EUROOPAN TILINTARKASTUSTUOMIOISTUIN EUROPEISKA REVISIONSRÄTTEN Report on the annual accounts of the European Chemicals Agency for the financial year 2009 together with the Agency s replies 12, RUE ALCIDE DE GASPERI TELEPHONE (+352) euraud@eca.europa.eu L LUXEMBOURG TELEFAX (+352) INTERNET:
2 2 CONTENTS Paragraph Introduction 1-2 Statement of Assurance 3-12 Comments on the budgetary and financial management 13 Table The Agency s replies
3 3 INTRODUCTION 1. The European Chemicals Agency (hereinafter referred to as "the Agency"), located in Helsinki, was set up by Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December Its main tasks are to ensure a high level of protection of human health and the environment as well as the free movement of substances, on their own, in preparations and in articles, while enhancing competitiveness and innovation. The Agency also promotes the development of alternative methods for the assessment of hazards of substances 2. The Agency became financially independent from the Commission on 1 January The Agency s 2009 budget amounted to 70,4 million euro compared with 66,4 million euro the previous year. The number of staff employed by the Agency at the end of the year was 355 as compared with 244 in the previous year. STATEMENT OF ASSURANCE 3. Pursuant to the provisions of Article 287(1), second subparagraph, of the Treaty on the Functioning of the European Union, the Court has audited the annual accounts 3 of the Agency, which comprise the financial statements 4 and the reports on implementation of the budget 5 for the financial year ended OJ L 396, , p. 1. The Table summarises the Agency's competences and activities. It is presented for information purposes. These accounts are accompanied by a report on the budgetary and financial management during the year which gives inter alia an account of the rate of implementation of the appropriations with summary information on the transfers of appropriations among the various budget items. The financial statements include the balance sheet and the economic outturn account, the cash-flow table, the statement of changes in capital and the annex to the financial statements which includes the description of the significant accounting policies and other explanatory information. The budget implementation reports comprise the budget outturn account and its annex.
4 4 31 December 2009 and the legality and regularity of the transactions underlying those accounts. 4. This Statement of Assurance is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/ The Director s responsibility 5. As authorising officer, the Director implements the revenue and expenditure of the budget in accordance with the financial rules of the Agency under his own responsibility and within the limits of authorised appropriations 7. The Director is responsible for putting in place 8 the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts 9 that are free from material misstatement, whether due to fraud or error, and for ensuring that the transactions underlying those accounts are legal and regular. The Court s responsibility 6. The Court s responsibility is to provide, on the basis of its audit, a statement of assurance as to the reliability of the annual accounts of the Agency and the legality and regularity of the transactions underlying them OJ L 248, , p. 1. Article 33 of Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 (OJ L 357, , p. 80). Article 38 of Regulation (EC, Euratom) No 2343/2002. The rules concerning the presentation of the accounts and accounting by the Agencies are laid down in chapter 1 of Title VII of Regulation (EC, Euratom) No 2343/2002 as last amended by Regulation (EC, Euratom) No 652/2008 of 9 July 2008 (OJ L 181, , p. 23) and are integrated as such in the Financial Regulation of the Agency.
5 5 7. The Court conducted its audit in accordance with the IFAC and ISSAI 10 International Auditing Standards and Codes of Ethics. Those standards require that the Court complies with ethical requirements and plans and performs the audit to obtain reasonable assurance about whether the accounts are free from material misstatement and whether the underlying transactions are legal and regular. 8. The Court s audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the accounts and about the legality and regularity of the transactions underlying them. The procedures selected depend on its audit judgement including the assessment of the risks of material misstatement of the accounts or of illegal or irregular transactions, whether due to fraud or error. In making those risk assessments internal control relevant to the entity s preparation and presentation of accounts is considered in order to design audit procedures that are appropriate in the circumstances. The Court s audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the accounts. 9. The Court believes that the audit evidence obtained is sufficient and appropriate to provide a basis for the opinions set out below. Opinion on the reliability of the accounts 10. In the Court s opinion, the Agency s Annual Accounts 11 present fairly, in all material respects, its financial position as of 31 December 2009 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its Financial Regulation International Federation of Accountants (IFAC) and International Standards of Supreme Audit Institutions (ISSAI). The Final Annual Accounts were drawn up on 16 June 2010 and received by the Court on 29 July The Final Annual Accounts, consolidated with those of the Commission are published in the Official Journal of the European Union by
6 6 Opinion on the legality and the regularity of the transactions underlying the accounts 11. In the Court s opinion, the transactions underlying the annual accounts of the Agency for the financial year ended 31 December 2009 are, in all material respects, legal and regular. 12. The comments which follow do not call the Court s opinions into question. COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT 13. A total of 20 million euro (29 % of the appropriations) was carried forward to the budgetary year In addition, 3,3 million euro (5 % of the appropriations) was cancelled. According to the accounting information, approximately 17,6 million euro (88 % of the appropriations carried forward) correspond to activities not yet implemented (or, in some cases, goods not received) at the year end. This situation indicated delays in the implementation of the activities of the Agency and was at odds with the budgetary principle of annuality. This Report was adopted by Chamber IV, headed by Mr Igors LUDBORŽS, Member of the Court of Auditors, in Luxembourg at its meeting of 14 and 16 September For the Court of Auditors Vítor Manuel da SILVA CALDEIRA President 15 November of the following year. These can be found on the following website orhttp://echa.europa.eu/publications/annual_accounts_en.asp.
7 Table - European Chemicals Agency (Helsinki) Areas of Union competence deriving from the Treaty Competences of the Agency as defined in Regulations(EC) 1907/2006 (REACH Regulation) and 1272/2008 (Regulation (EC) No 1272/2008 (Classification, labelling and packaging of substances and mixtures) Governance Resources made available to the Agency in 2009 (Data for 2008) Products and services provided during the financial year 2009 (Data for 2008) 12 The legal base of ECHA s founding regulation, the REACH Regulation (EC) No 1907/2006, is Article 114 of the Treaty on the Functioning of the EU. Objectives The purpose of the REACH Regulation is to ensure a high level of protection of human health and the environment, including the promotion of alternative methods for assessment of hazards of substances, as well as the free circulation of substances on the internal market while enhancing competitiveness and innovation.(article 1 of the REACH Regulation) The Agency should be central to ensuring that chemicals legislation and the decision-making processes and scientific basis underlying it have credibility with all stakeholders and the public. The Agency should also play a pivotal role in coordinating communication concerning this Regulation and in its implementation. The confidence in the Agency of the Union institutions, the Member States, the general public and interested parties is therefore essential. For this reason, it is vital to ensure its independence, high scientific, technical and regulatory capacities, as well as transparency and efficiency (recital 95 of the REACH Regulation) Tasks ECHA is established for the purposes of managing and in some cases carrying out the technical, scientific and administrative aspects of the REACH Regulation and to ensure consistency at Union level in relation to these aspects.(art 75 of the REACH Regulation) The Agency is also to provide the Member States and the institutions of the Union with the best possible scientific and technical advice on questions relating to chemicals which fall within its remit and which are referred to it in accordance with the provisions of the REACH Regulation. (Article 77(1) of the REACH Regulation) ECHA also has tasks related to the classification and labelling of chemical substances deriving from the CLP Regulation (EC) 1272/2008. In particular, the Agency is to provide Member States and the institutions of the Union with the best possible scientific advice and provide industry and Member State authorities with technical and scientific guidance. 1 - Management Board One representative of each Member State, appointed by the Council, and a maximum of six representatives appointed by the Commission, including three individuals from interested parties without voting rights and, in addition, two independent persons appointed by the European Parliament. (Art 79 of the REACH Regulation) Tasks: Article 78 of the REACH Regulation and framework financial regulation for agencies, mainly adopting annual and multi-annual work programme, the final budget, a general report, internal rules of procedures and appointment of and disciplinary authority over of the Executive Director. In addition appointment of Board of Appeal and Committee members. 2 - Executive Director Tasks: Art 83 of the REACH Regulation 3 - Committees ECHA comprises three Committees (Risk Assessment, Member States and Socio-Economic Analysis) Tasks: Article 76(1) (c-e) of the REACH Regulation. 4 - Forum for Exchange of Information on Enforcement Tasks: Article 76 ((1) (f) of the REACH Regulation 5 - Secretariat Tasks: Article 76 ((1) (g) of the REACH Regulation 6 - Board of Appeal Tasks: Article 76 ((1) (h) of the REACH Regulation 7 - External audit Court of Auditors. 8 - Internal audit IAS, Internal audit service Commission. 9 - Discharge authority Parliament, acting on a recommendation from the Council. Budget (including amending budget) 70,4 (66,4) million euro, including: Revenue from fees: 2,2 (3,8) million euro Union contribution: 66,6 (62,6) million Staff at 31 December (220) posts in the establishment plan Number of posts occupied: 293 (210) Other staff: 62 (34) Contract staff, seconded national experts and agency staff TOTAL staff numbers: 355 (244) Allocated to: - operational tasks: 237 (164) - administrative and support tasks: 118 (80) Preparations and capacity building as a new Agency in fields of registration, evaluation, authorisations and restrictions, classification and labelling and committees Development of REACH-IT system and other IT systems Administrative and management systems built up Number of pre-registrations: ( ) for ( ) substances; (65.000) companies signed up Number of completed registration dossiers exc. PPORDs: 500 (70) Number of inquiries: (250) Number of questions answered by helpdesk: (12.300) Number of new guidance documents issued: 2 (6) Number of guidance updates issued: 0 (10) Number of compliance checks completed: 14 (1) Number of unanimous MSC agreements: 15 (15) Number of RAC/SEAC opinions: 1 Number of substances identified for inclusion in the Candidate list: 15 (15) Number of recommendations of substances for inclusion as priority substances in REACH Annex XIV: 1 Source: Information supplied by the Agency. Number of proposals for harmonised classification and labelling: 30 (14) 12
8 ECHA European Chemicals Agency THE AGENCY S REPLY 13. The 29% of the total appropriations carried forward of the 2009 budget compares to 22% in the year before, and 5% of the cancelled appropriations were a decrease from 23% in 2008, which reflect an improvement in the total budget implementation. The Agency was faced with unforeseen delays in the implementation of some of its activities and contracting, resulting in the carry-over of the funds. The Agency will continue to further develop the planning and monitoring of its procurement and budget execution so as to bring further down the proportion of carry forward appropriations further in 2010.
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