C_2008311EN.01003401.xml

on the annual accounts of the European Agency for the Management of Operational Cooperation at the External Borders of the Member States for the financial year 2007 together with the Agency's replies

(3) These accounts were drawn up on 13 June 2008 and received by the Court on 27 June 2008.

(4) International Federation of Accountants (IFAC) and International Standards of Supreme Audit Institutions (ISSAI).

(5) For 11 grant agreements closed in 2007, the Court estimated that the costs were overestimated by 30 % in average. The commitments carried over to 2008 could therefore be overestimated by an amount of approximately 5,5 million euro.

(6) The funds are not only unused but also largely unproductive as they are placed on an account bearing only 0,7 % interest.

(7) The Agency introduced the Register of Exceptions on 1 April 2007. The first entry was made on 30 May 2007. At 31 December 2007, the Register contains 64 exceptions linked to the operational activities.

(8) As laid down in Article 110 of the Staff Regulations. For example, only 8 years of experience is required by the Agency for an AD 10 post whilst in all other Agencies 12 years is the norm.

Table 1

The European Agency for the Management of Operational Cooperation at the External Borders — Frontex (Warsaw)

Areas of Community competence deriving from the Treaty

Competences of the Agency as defined in Council Regulation (EC) No 2007/2004

Governance

Resources made available to the Agency in 2007

(2006)

Products and services supplied in 2007

The Community policy in this area aims at developing common standards and procedures with regard to carrying out checks on persons crossing the external borders of the Member States; furthermore measures should be taken to ensure cooperation between the relevant departments of the administrations of the Member States in the areas covered by this title, as well as between the Member States and the Commission.

(Articles 62(2)(a) and 66 of the Treaty)

Objectives

Frontex was established with a view to improving the integrated management of the external borders of the Member States of the EU.

Frontex must:

(a)	facilitate and render more effective the application of existing and future Community measures relating to the management of external borders.

(b)	ensure the coordination of Member States' actions in the implementation of those measures, thereby contributing to an efficient, high and uniform level of control on persons and surveillance of the external borders of the Member States.

(c)	provide the Commission and the Member States with the necessary technical support and expertise in the management of the external borders and promote solidarity between Member States.

Main tasks:

(1)	to coordinate operational cooperation between Member States in the field of management of external borders;

(2)	to assist Member States on training of national border guards and establish common training standards;

(3)	to carry out risk analysis;

(4)	to follow up on the development of research in control and surveillance;

(5)	to assist Member States in circumstances requiring increased technical and operational assistance;

(6)	to provide Member States with the necessary support in organising joint return operations.

1. Management Board

Composed of:

—	One representative from each Member State;

—	Two representatives from the Commission;

—	One representative per Schengen associated country (Norway, Iceland) with a limited right to vote.

2. Executive Director

Appointed, on a proposal by the Commission, by the Management Board.

3. External audit

European Court of Auditors.

4. Discharge authority

Parliament acting on recommendation from the Council.

Final budget for 2007

42,2 (19,2) million euro

Community contribution:

40,1 million euro or 97,2 % (18,9 million euro or 98,8 %)

Contribution from the UK & IE:

0,8 million euro or 1,9 % (0,2 million euro or 1,2 %)

Contribution from SAC:

0,9 million euro or 2,1 %

Staff numbers at 31 December 2007

In the Establishment Plan: 49 (28)

Temporary staff 48 (25)

Total staff number: 132 (72)

+84 (47) other staff (seconded national experts, contract staff, auxiliaries).

Assigned to the following tasks:

—	operational: 103 (43)

—	administrative: 29 (29)

Risk analysis:

2 General/Annual Assessments were produced;

21 Tailored Assessments were finalised or are due to be finalised by end Q1 2008;

40 Analytical ex-ante assessments of Frontex Joint Operations were issued;

2 Law Enforcement and 3 public bulletins were produced.

The system for regular exchange of information (Incident Reporting System-IRS, Monthly Analytical Reports and Monthly Statistical reports) within Frontex Risk Analysis Network was launched.

Operational cooperation:

25 Frontex coordinated joint operations were held; 7 Pilot projects were launched.

Assistance to the MS':

Frontex assisted Member States in 10 of their return operations on their request and coordinated and co-financed 9 return operations of Member States.

Assistance return operations:

Frontex coordinated and co-financed 9 return operations of Member States.

Training:

Within the framework of 13 projects 39 meetings were held or co-financed. During 38 training sessions of different durations, 600 border guards of different level were trained.

Research & development:

8 reports and bulletins were published;

5 workshops on R&D issues were held;

9 projects were initiated; some of them are still ongoing;

18 meeting, conferences, or seminars were attended.

Cooperation with non-EU partner countries:

The Management Board mandated Frontex to negotiate working arrangements with 5 countries (the former Yugoslav Republic of Macedonia, Cape Verde, Egypt, Moldavia, Georgia);

Working arrangement with Ukraine was signed;

Involvement of Russia and Ukraine in 2 IBM seminars;

Ukraine was involved in 5 Frontex pilot projects.

Cooperation with Europol and other relevant organisations:

Frontex contributed to Europol's ‘Organised Crime Threat Assessment’ (‘OCTA’).

The established working level cooperation with numerous organisations (e.g. IOM, UNHCR, OLAF, Eurojust) was further maintained and utilized.

Source: Information submitted by the Agency.

Table 2

Frontex- European Agency for the Management of Operational Cooperation at the External Borders (Warsaw) — Implementation of the budget for the financial year 2007

(1000 euro)
Revenue			Expenditure
Source of revenue	Revenue entered in the final budget for the financial year	Revenue collected	Allocation of expenditure	Final budget appropriations					Appropriations carried over from the previous financial year
Source of revenue	Revenue entered in the final budget for the financial year	Revenue collected	Allocation of expenditure	final	committed	paid	carried over	cancelled	available	paid	cancelled
Community subsidies	40 980	40 991	Title I Staff	9 387	7 767	6 332	1 435	1 620	1 065	417	648
Other subsidies	1 170	820	Title II Administration	5 267	4 018	1 765	2 593 (1)	909 (1)	931	726	205
Other revenue	p.m.	9	Title III Operating activities	27 496	26 599	5 214	18 399	3 884	9 778	5 942	3 836
Total	42 150	41 820	Total	42 150	38 384	13 312	22 426	6 413	11 774	7 085	4 689
Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts. Revenue collected and payments are estimated on a cash basis.

Table 3

The European Agency for the Management of Operational Cooperation at the External Borders (Warsaw) — Economic outturn account for the financial year 2007 and 2006

(1000 euro)
	2007	2006
Operating revenue
Community subsidies	30 439	15 129
Contribution from countries	1 738	226
Miscellanous	127	26
Total (a)	32 304	15 381
Operating expenditure
Staff expenditure	4 090	860
Fixed asset-related expenditure	78	7
Other administrative expenditure	4 931	613
Operational expenditure	20 887	4 349
Total (b)	29 986	5 829
Surplus /(deficit) from operating activities (c = a – b)	2 318	9 552
Financial operations expenditure (d)	1	5
Surplus/(deficit) from non-operating activities (e = – d)	–1	–5
Economic result for the year (f = c + e)	2 317	9 547
Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts: these accounts are drawn up on an accrual basis.

Table 4

The European Agency for the Management of Operational Cooperation at the External Borders (Warsaw) — Balance sheet at 31 December 2007 and 2006

(1000 euro)
	2007	2006
Non-current assets
Intangible fixed assets	103	0
Tangible fixed assets	588	31
Current assets
Short-term prefinancing	40	0
Short-term receivables	1 457	75
Cash and cash equivalents	32 637	14 236
Total assets	34 825	14 342
Current liabilities
Provisions for risks and charges	75	84
Accounts payable	22 886	4 711
Total liabilities	22 961	4 795
Net assets	11 864	9 547
Reserve
Accumulated surplus/deficit	9 547	0
Economic result for the year	2 317	9 547
Net capital	11 864	9 547
Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts: these accounts are drawn up on an accrual basis.

(1) Includes non-automatic carry-overs of 340 000 euro.

Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts. Revenue collected and payments are estimated on a cash basis.

THE AGENCY'S REPLIES

The 19,9 million euro increase of the budget is based on two amendments:

(1)	12,8 million euro of the initial budget were frozen by the Budget Authority and were effectively made available in June 2007 only; and thus commitments were only possible in the second half of 2007.

(2)

7 million euro were made available by the Commission in June 2007 in order to be used especially for Sea Border operations. As these operations require the availability of vessels and aircrafts from Member States and, due to their complexity, oblige to an important and time consuming effort of coordination, commitments could only be made late in 2007.

This situation affected the volume of payments in 2007 and led to significant carry-overs.

However, the Agency underlines that the monitoring of the expenditure has improved significantly in 2007. Monthly budget implementation reports have been prepared and are distributed to the management.

The estimation of costs is a complex issue and a stricter budget management is going to be implemented to solve this problem. Frontex started to build up the centralised record for technical equipment (CRATE). This record lists equipment from Member States that can be used during joint operations and is linked to a common cost calculation method (REM). The REM concept will be used and assessed during 2008/2009 and shall lead to a more efficient use of the budgetary allocation. In addition Frontex started to introduce phases into its long term operations, aiming to ease the budget management.

Frontex and Member States have agreed in the Framework Partnership Agreement (FPA) that the Member State will send in claims for reimbursement within 45 days after the action has ended. However, given the difficulties of Member States to collect all invoices in due time, the Agency does not refuse payment in case a claim is received later than 45 days. The Executive Director made the members of the Management Board repeatedly aware of this problem during their meetings.

Since early 2008, reminders are sent systematically to participating Member States.

Starting mid 2008 Frontex will distribute to all Member States on a monthly basis an overview of all the payments.

In addition, Frontex units/sectors are informed on a monthly basis on pending invoices.

10.	The Agency will try to re-negotiate with its bank the conditions and examine if other banks may offer better conditions.

11.

As the development until the end of June 2008 showed no improvements in absolute numbers of exceptions reported, an action plan was developed; this action plan is aiming at improving the situation by e.g. setting deadlines to Member States for forwarding to the agency budget estimation on their co-financing to establish the final amount for grants in order to avoid ex-post signatures. Other measures envisaged are the setting up of a commitment monitoring system for Project managers and eventually the use of an IT supported tool.

12.

The Agency applied the principles in analogy with Article 31, paragraph 2 of the Staff Regulations which stipulates that in order to address specific needs of the Institutions, labor market conditions prevailing in the Community may also be taken into account when recruiting.

The Agency must attract highly qualified specialists in various fields and particular in law enforcement and therefore needs to offer an attractive grading and salary for the posts in question taking into account the negative impact of the correction coefficient for salaries applied for Poland.