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REPORTon the annual accounts of the European Chemicals Agency for the financial year 2008, togetherwith the Agency’s replies
 (2009/C 304/07)
 CONTENTS
 Paragraph Page
 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-2 34STATEMENT OF ASSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-12 34COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT . . . . . . . . . . . . . . . . . 13-14 35OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 35Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
 The Agency’s replies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37EN
 15.12.2009 Official Journal of the European Union C 304/33
 
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 Councilof 18 December 2006 (
 1
 ). Its main tasks are ensure a high levelof protection of human health and the environment as well asthe free movement of substances, on their own, in preparationsand in articles, while enhancing competitiveness and innovation.This Regulation should also promote the development of alter
­
native methods for the assessment of hazards of substances (
 2
 ).The Agency became financially independent from theCommission on 1 January 2008.2. The Agency’s 2008 budget amounted to 66,4 millioneuro.The number of staff employed by the Agency at the endof the year was 244.
 STATEMENT OF ASSURANCE
 3. Pursuant to the provisions of Article 248 of the Treaty the Court has audited the annual accounts (
 3
 ) of the Agency,which comprise the ‘financial statements’ (
 4
 ) and the ‘reportson implementation of the budget’ (
 5
 ) for the financial yearended 31 December 2008 and the legality and regularity of the transactions underlying those accounts.4. This Statement of Assurance is addressed to theEuropean Parliament and the Council in accordance withArticle 185(2) of Council Regulation (EC, Euratom)No 1605/2002 (
 6
 ).
 The Director’s responsibility
 5. As authorising officer, the Director implements therevenue and expenditure of the budget in accordance withthe financial rules of the Agency under his own responsi
­
bility and within the limits of authorised appropriations (
 7
 ).The Director is responsible for putting in place (
 8
 ) the organi
­
sational structure and the internal management and controlsystems and procedures relevant for drawing up finalaccounts (
 9
 ) that are free from material misstatement,whether due to fraud or error, and for ensuring that thetransactions 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 theannual accounts of the Agency and the legality and regularity of the transactions underlying them.7. The Court conducted its audit in accordance with theIFAC and ISSAI (
 10
 ) International Auditing Standards andCodes of Ethics. Those standards require that the Courtcomplies with ethical requirements and plans and performsthe audit to obtain reasonable assurance about whether theaccounts are free from material misstatement and whetherthe underlying transactions are legal and regular.8. The Court’s audit involves performing procedures toobtain audit evidence about the amounts and disclosures inthe accounts and about the legality and regularity of thetransactions underlying them. The procedures selecteddepend 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 orerror. In making those risk assessments internal controlrelevant to the entity’s preparation and presentation of accounts is considered in order to design audit proceduresthat are appropriate in the circumstances. The Court’s auditalso includes evaluating the appropriateness of accountingpolicies used and, the reasonableness of accountingestimates made by management, as well as evaluating theoverall presentation of the accounts. 9. The Court believes that the audit evidence obtained issufficient and appropriate to provide a basis for the opinionsset out below.
EN
 C 304/34 Official Journal of the European Union 15.12.2009
 (
 1
 ) OJ L 396, 30.12.2006, p. 1.(
 2
 ) The
Table
summarises the Agency's competences and activities. It ispresented for information purposes.(
 3
 ) These accounts are accompanied by a report on the budgetary andfinancial management during the year which gives inter alia anaccount of the rate of implementation of the appropriations withsummary information on the transfers of appropriations among thevarious budget items.(
 4
 ) The financial statements include the balance sheet and the economicoutturn account, the cash-flow table, the statement of changes incapital and the annex to the financial statements which includes thedescription of the significant accounting policies and otherexplanatory information.(
 5
 ) The budget implementation reports comprise the budget outturnaccount and its annex.(
 6
 ) OJ L 248, 16.9.2002, p. 1.(
 7
 ) Article 33 of Commission Regulation (EC, Euratom) No 2343/2002of 23 December 2002 (OJ L 357, 31.12.2002, p. 72).(
 8
 ) Article 38 of Regulation (EC, Euratom) No 2343/2002.(
 9
 ) The rules concerning the presentation of the accounts andaccounting by the Agencies are laid down in chapter 1 of TitleVII of Regulation (EC, Euratom) No 2343/2002 as last amended by Commission Regulation (EC, Euratom) No 652/2008 of 9 July 2008 (OJ L 181, 10.7.2008, p. 23) and are integrated as such inthe Financial Regulation of the Agency.(
 10
 ) International Federation of Accountants (IFAC) and InternationalStandards of Supreme Audit Institutions (ISSAI).
 
Opinion on the reliability of the accounts
 10. In the Court’s opinion, the Agency’s AnnualAccounts (
 11
 ) present fairly, in all material respects, itsfinancial position as of 31 December 2008 and the resultsof its operations and its cash flows for the year then ended,in accordance with the provisions of its Financial Regulation.
 Opinion on the legality and the regularity of the trans
­
actions underlying the accounts
 11. In the Court’s opinion, the transactions underlying theannual accounts of the Agency for the financial year ended31 December 2008 are, in all material respects, legal andregular.12. The comments which follow do not call the Court’sopinions into question.
 COMMENTS ON THE BUDGETARY AND FINANCIALMANAGEMENT
 13. Budgetary payments amounted to 36,4 million euro,54 % of the amount committed. The operational activities inparticular were delayed due to difficulties in implementing theIT system and the lack of qualified staff. Commitment appro
­
priations amounting to 20 million euro were foreseen for oper
­
ational activities but 8,2 million euro of these were carriedforward and 7,5 million euro cancelled. This situation is atodds with the annuality principle and indicates weaknesses inthe planning of the Agency’s activities.14. For a significant number of transactions, totalling morethan 0,4 million euro, the expenditure was not covered by abudget commitment and as such was irregular. Payment appro
­
priations were unduly carried forward to 2009; in most of thecases they were related to activities to be implemented in2009 (
 12
 ) and in one case, to an error in the evaluation of acommitment (
 13
 ). This situation indicates a need for the Agency to improve its procedures for the following-up the use of itsappropriations.
 OTHER MATTERS
 15. The Agency’s Director appointed himself chairman of theselection board in 14 recruitment procedures. Given hisprerogatives as Appointing Authority, the independence (
 14
 ) of the other members, of these selection boards who aretemporary agents subordinated to the Director was not guar
­
anteed. The audit of three procedures showed weaknesses in thedocumentation summarising the work of the selection boards:in particular, a lack of justification for the decisions taken at thevarious stages in the selection process.This report was adopted by the Court of Auditors in Luxembourg at its meeting of 8 October2009.
 For the Court of Auditors
 Vítor Manuel da SILVA CALDEIRA
 President
EN
 15.12.2009 Official Journal of the European Union C 304/35
 (
 11
 ) The Final Annual Accounts were drawn up on 15 June 2009 andreceived by the Court on 29 June 2009. The Final AnnualAccounts, consolidated with those of the Commission arepublished in the
Official Journal of the European Union
by 15November of the following year. These can be found on thefollowing website http://eca.europa.eu or http://echa.europa.eu/publications/annual_accounts_en.asp(
 12
 ) Four cases of a total approximate value of 576 000 euro.(
 13
 ) Value 100 000 euro.(
 14
 ) Article 11 bis of the Staff Regulations.

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