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CM(2010)103 adddendum 31 August 20101
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1096 Meeting, 20 October 2010
11 Administration and Logistics


11.2 Financial Statements and Budgetary Management Accounts of the Partial Agreement establishing the European Centre for Global Interdependence and Solidarity for the year ended 31 December 2009 – Follow up to the Report of the External Auditor
Memorandum of the Secretary General

Item to be considered by the GR-PBA at its meeting on 23 September 2010

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The Secretary General is pleased to note that, as for 2007 and 2008, the External Auditor has certified that the financial statements of the North-South Centre are in full compliance with the requirements of IPSAS (International Public Sector Accounting Standards).

The Secretary General intends to take the following action to follow up the recommendations made in the External Auditor's report.

RECOMMENDATIONS FURTHER TO THE AUDIT OF THE FINANCIAL STATEMENTS

Recommendation 1: We recommend that the financial statements of the North-South Centre should be presented in a specific document, different from that containing the budgetary management accounts, so as to highlight the specific characteristics of the disclosures made in each of these documents. This should enable the North-South Centre's Executive Council and subsequently the Committee of Ministers to deliberate on each of these documents.

As the External Auditor rightly pointed out, the financial statements are clearly identified under the current presentation. The Secretary General nonetheless takes note of this recommendation and will in future present the financial statements and the budgetary management accounts in separate documents.

Timeframe: Preparation of the 2010 accounts

Recommendation 2: We recommend that the statement of internal control should be grouped together with the statement by management and be adapted to the North-South Centre's environment and to the specific internal control procedures performed there.

As recommended by the External Auditor, the financial statements include a statement of internal control specific to the Centre. In the budgetary decentralisation context it seems necessary to preserve the distinction between the report by management and the statement of internal control.

Recommendation 3: To increase financial revenue, we recommend that the North-South Centre should invest funds for which no immediate use is foreseen in a short-term deposit account.

This recommendation has already been implemented even though the anticipated increase in financial revenue is not very significant.

Recommendation 4: We recommend that an accounting instruction should be submitted to the Committee of Ministers and the managing boards of the partial agreements, setting out all the conditions whereby the partial agreements and joint programmes or projects funded with voluntary contributions participate in coverage of the Council of Europe's common expenses. This accounting instruction should be discussed by the Budget Committee and adopted by the Committee of Ministers.

The partial agreements' fixed sum contribution to the Council of Europe's ordinary budget is approved at the time of adoption of the annual budget. The participation of projects funded with voluntary contributions and joint programmes to help cover the Organisation's common expenses was already decided at the 915th meeting of the Committee of Ministers (CM(2005)1).

This matter will be discussed by the Budget Committee at its meeting in October 2010, with a view to a possible subsequent decision by the Committee of Ministers.

Timeframe: End of 2010

RECOMMENDATIONS FURTHER TO THE AUDIT OF THE BUDGETARY MANAGEMENT ACCOUNTS

Recommendation 1: We recommend that the Committee of Ministers adapt the Financial Regulations so as to include the possibility for the Council of Europe and its partial agreements to conclude administrative arrangements. To make their use more reliable, we recommend that an instruction should be issued to set out with greater precision the procedures for implementing and monitoring administrative arrangements and that the model agreement should be revised to enable the Council of Europe and its partial agreements to obtain full guarantees as to the proper use of funds.

The Secretary General considers that an amendment of the Financial Regulations is not necessary. The Secretariat will conduct a detailed review of the existing guidelines and "model" administrative arrangements, which were last updated in 2007 and 2008, so as to improve the level of control.

Timeframe: First half of 2011

Recommendation 2: We recommend that the functioning of the imprest should be formalised (authorised types of expenditure, cash ceiling, conditions for keeping sums of cash, frequency of transmission of supporting documents, etc.) and that a procedure should be introduced whereby the staff concerned clearly accept this responsibility.

The Secretariat undertakes to review the functioning of the imprest and to draw up a new procedure to formalise the arrangements.

Timeframe: End of 2010

Note 1 This document has been classified restricted until examination by the Committee of Ministers.


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