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COUNCIL OF

THE EUROPEAN UNION

Brussels, 15 December 2008





17160/08





EUROPOL 83



NOTE

from:	Europol

to:	Article 36 Committee

Subject :	Audit report and discharge for the period of 1 January 2007 -
31 December 2007



Article 36, paragraphs 3 and 5 of the Europol Convention reads:

"(3)	The joint audit committee shall in accordance with the procedure
laid down in Title VI of the Treaty on European Union submit to the
Council an audit report on the annual accounts; prior thereto the
Director and Financial Controller shall be given an opportunity to
express an opinion on the audit report and the report shall be discussed
by the Management Board.

A decision on the discharge to be given to the Director in respect of
budget implementation for the financial year in question shall be taken
by the Council, after examination of the report on the annual accounts."

2.	In Annex please find a letter of the Chairman of the Europol
Management Board to the Secretary-general of the Council of the European
Union (annex 1) together with the audit report for the period 1 January
2007 – 31 December 2007 as drawn up by the Joint Audit Committee of
Europol and discussed by the Management Board (annex 2).



3.	On the basis of the Audit Report the Management Board decided to
recommend to the Council to give discharge to the Director of Europol
for the implementation of the 2007 budget.

4.	On this basis, the Article 36 Committee is requested to invite
COREPER/Council to examine the Audit Report and to give discharge to the
Director of Europol in respect to the implementation of the budget for
the period 1 January 2007 – 31 December 2007.

________________________

ANNEX 1

EUROPOL

Management Board	The Hague, 5 December 2008

File nº MBS 186.2008  



Dear Secretary General,

The Management Board meeting held on 3-4 December 2008 considered the
question of discharge to the Europol Director for the implementation of
the 2007 budget, in accordance with Article 55(2) of the Financial
Regulation and taking into account the advice of the Financial Committee
meeting on 10 November 2008.

The basis for the discussions included the annual accounts as presented
by Europol, the audit report from the Joint Audit Committee (JAC) and
the opinions of the Financial Controller and of Europol on the audit
report.

The JAC was of the opinion that the financial statements of Europol
fairly presented the financial position as at 31 December 2007. 

The JAC also made the following observations/recommendations:

Budget implementation and treasury management – The underspending of
the budget and large cash balances on Europol’s bank accounts suggest
that there is still room for improvement in the area of budgetary
planning and accuracy.



Procurement procedures – Need to be carefully monitored in order to
ensure a sufficiently rigorous application.

Effectiveness of information systems – The JAC draws attention to the
responsibility of the Member States to provide both the Europol
Information System (EIS) and the overall analysis system for
intelligence and support (OASIS) with information in accordance with the
Convention. It also observes, for both EIS and OASIS, that there are no
performance indicators to assess the impact or effectiveness of the
systems.

The establishment of Europol as a European Agency:

Accrual-based accounting - The JAC is of the opinion that although
Europol is exercising proper risk management, there is still a risk that
it may not have the capacity required for a timely implementation of
accrual-based accounting.  The full support of the European Commission
is a prerequisite to avoid such a situation.

Staff turnover – While there is not yet a clear upward trend in the
number of resignations, the JAC recognises an inherent risk of higher
staff turnover in the coming period.

Financial Controller’s function – The JAC welcomes Europol’s
intention to ensure a smooth transformation of the Financial
Controller’s function into an internal audit function from 2010.

New Headquarters – Due to the delay in Europol’s planned move to its
new headquarters, a budgetary impact in 2010 (when Europol will already
have agency status and will be financed from the Community budget) is
expected.

Unemployment fund – Although it is unlikely to occur, the most
pessimistic scenario is that Europol could exhaust the funds available
in its unemployment fund.  The JAC therefore recommends more frequent
assessments on the assets held by the fund.

The JAC also stressed the following observations/recommendations made in
2006:

Contract database – Due to the inherent vulnerability of a
spreadsheet-based database, the JAC recommends that a more sustainable
solution be put in place as soon as possible.



Business continuity – A business continuity plan and disaster recovery
plan should be developed.

National pension rights – There is a lack of adequate justification
for delaying requests from staff to transfer pension rights acquired
under national pension schemes.

Legal claim against former employee – Although it is unlikely that any
more of the outstanding claim will be recovered, there has been some
development concerning information on the former employee’s bank
accounts and Europol continues to investigate this matter.

Considering the comments provided by the Financial Controller and
Europol, the Financial Committee came to the conclusion that discharge
should be given to the Europol Director.

After taking careful note of the observations made by the JAC and the
conclusions from the Financial Committee, the Management Board decided
to recommend to the Council to give discharge to the Europol Director
for the implementation of the 2007 budget.

Yours sincerely,

Bernard Petit

Chairman of the Management Board

ANNEX 2



ANNEX 3

17160/07		EB/tas	  PAGE  1 

	DG H 3A	 EN

17160/08		EB/tas	  PAGE  5 

ANNEX 1	DG H 3A	  EN

17160/08		EB/tas	  PAGE  7 

ANNEX 2	DG H 3A	  EN

17160/08		EB/tas	  PAGE  17 

ANNEX 3	DG H 3A	  EN

Mr Javier Solana

Secretary-General

Council of the European Union

Brussels