Ministers’ Deputies
CM Documents

CM(2007)152 21 September 20071
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1012 Meeting, 27-29 November 2007
11 Administration and Logistics


11.2 Meeting report of the Budget Committee – September 2007 session

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1. The Budget Committee met in Strasbourg on 10-13 September 2007.

2. The Committee considered the following items:

    I. Opening of the meeting

      - report of the May 2007 meeting
      - minutes of the May 2007 meeting

    II. Presentation of the budgetary context for 2008
    III. Meeting with the External Auditor on the 2006 accounts
    IV. Budgets of the Partial Agreements for 2008
    V. Meeting with the Internal Auditor on his 2006 report
    VI. Allowances paid to staff
    VII. Situation of the management structure of the Pension Reserve Fund
    VIII. Any other business

3. The agenda of the meeting appears at Appendix I and the list of participants at Appendix II.

I. OPENING OF THE MEETING

Report of the May 2007 meeting

4. The Committee took note of the report of the May 2007 meeting.

Minutes of the May 2007 meeting

5. The Committee took note of the minutes of the May 2007 meeting.

II. PRESENTATION OF THE BUDGETARY CONTEXT FOR 2008

6. The Director General of Administration and Logistics informed the Committee of developments in respect of the budget for 2008 for the Organisation. In particular he drew its attention to the following decisions taken by the Ministers’ Deputies at their 1001st meeting concerning the criteria for fixing the annual salary ceiling, the priorities for 2008 and their budgetary implications, and the allocation of the financial result of the 2006 Ordinary Budget.

7. The Director General of Administration and Logistics also informed the Budget Committee that the decision to sell the EDQM building in the Meinau had been taken by the Committee of Ministers at their 989th meeting without. No decision however had been taken on the allocation of the sale proceeds.

8. The Committee took note of the fact that no offers had yet been received for the purchase of the building.

9. Finally, the Director General of Administration and Logistics drew the attention of the Committee to the document SG/Inf(2007)4: “Building on our Strengths: Eight initiatives to shape the Council of Europe for the future - Towards a Medium-term Strategy”. He explained that the document had been examined by the Ministers’ Deputies earlier in the month, and would be further discussed by the GT-REF.INST, the working party on institutional reforms.

III. MEETING WITH THE EXTERNAL AUDITOR ON THE 2006 ACCOUNTS

10. The Committee held an exchange of views with Mr Gary Heywood, representing the United Kingdom’s National Audit Office (NAO), on the subject of the 2006 accounts and the NAO’s report thereon.

11. The comments of the External Auditor are similar to the concerns expressed by the Budget Committee, in particular as regards the simplification and specification of the budgetary documents (draft budgets and Programme of Activities) and the link between logframes and budget proposals. The Budget Committee is to receive a publication on the role and mission of an audit committee.

IV. BUDGETS OF THE PARTIAL AGREEMENTS FOR 2008

General observation

12. The Committee noted that the same exercise as for 2006 and 2007, aimed at identifying efficiency gains, had been conducted during the preparation of the partial agreements' draft budgets.

13. The Committee noted that in 2008, in accordance with the proposals presented by the Secretary General in his priorities document, it was intended that certain activities which had been previously carried out by the Partial Agreement in the Social and Public Health Field would be transferred, some to the Ordinary Budget (activities in the field of disabilities) and some to the Partial Agreement – European Pharmacopœia (activities in the field of pharmaceuticals). Accordingly, no draft budget for the Partial Agreement in the Social and Public Health Field was presented for 2008.

14. The Committee also noted that a new partial agreement, The Enlarged Partial Agreement on Sport, had been formally created in June 2007, and recalled that the Committee had made recommendations in respect of this partial agreement’s first draft budget (for the part year 2007) using the “silent procedure”.

15. The Committee wished to examine the draft budget for 2008 for this partial agreement, along with details of expenditure in respect of the budget allocated for 2007.

16. The Committee was informed that the first meeting of the Governing Board of the newly created partial agreement had not yet taken place and that consequently a draft budget for 2008 had not yet been drafted. The draft budget for 2008 for this partial agreement would be presented to the Committee at a later date.

17. The Committee noted that, as regarded member states' contributions to the budgets of the partial agreements, which it had examined during the meeting, in the draft budgets for 2008 the aggregate amount of contributions to all the partial agreements amounted to a decrease of some € 1.2 M in nominal terms as compared to member states' total contributions to the partial agreements in 2007, mainly due to the termination of the activities of the Partial Agreement in the Social and Public Health Field.

18. As detailed above this does not include the full year effect of the creation of the Enlarged Partial Agreement on Sport, which is estimated at approximately € 400 000, subject to the drafting of the 2008 budget following the first meeting of the Governing Board of the Partial Agreement.

Logframes

19. The Committee noted the efforts made by some partial agreements, namely Pompidou, Graz, GRECO, Eurimages and the Venice Commission, to streamline the presentation of expected results, by a reduction in the number of logframes and more quantification of performance indicators . While welcoming these efforts, which should be extended to the other partial agreements, the Committee considered that, whenever possible, it was of the utmost importance to have data concerning results and performance achieved in previous years as a basis for justifying variations in budgetary requests. As regards the expected results and performance indicators concerning human resources and financial management, the Committee considered that these are important internal management control issues, but that they should not be included systematically in the logframes; only when problems have been identified in previous years should they be included.

    European Pharmacopœia - Biological standardisation programme - Publications, development, certification and conferences

20. At its meeting in May 2007 the Budget Committee had discussed the financing of the Pharmacopœia’s future needs and had decided to return to this item at its meeting in September 2007 when examining the draft budget for 2008. It had also asked to be provided, during its discussion, with budgetary forecasts for the next three years, an estimated balance sheet at 31 December 2006 and budgetary accounts for 2004 to 2006. It was also provided, during the meeting, with a consolidated budget, which is appended to this document, of the Partial Agreement for 2006 to 2008.

21. In the light of the additional information supplied, the Committee examined the budgetary proposals for 2008, reflecting the growth of the EDQM’s activities.

22. The Secretariat indicated to the Committee that the Pharmacopœia’s budgetary presentation had proved suitable for many years, but now needed to be thoroughly reviewed in order to make it simpler and more transparent. The Committee therefore noted that a new budgetary structure would be presented to it for its meeting in May 2008. It asked for these proposals to be accompanied by medium-term budgetary prospects (2009 to 2011) bearing in mind the change in Director of the Partial Agreement and prospects for collaboration in new programmes with the European Union.

Draft budget of the European Pharmacopœia

23. The Committee recommended that the share of the budget financed by the member states should be maintained at an appropriate level in order to confirm the Pharmacopœia’s intergovernmental role in the public health field. One member was unable to subscribe to this proposal, considering that contributions should be kept as low as possible taking into account the financial situation of the EDQM.

24. The Committee supported the principle of setting up a special investment account encompassing all the activities of the Pharmacopœia, because this mechanism, which would be identical to that used under the Ordinary Budget, would be suited to the Pharmacopœia’s needs and constraints, especially in terms of technical equipment.

25. Except for one member, the Committee was, however, not in favour of the setting up of a special reserve fund to deal with unexpected contingencies for which the special investment fund may be used in respect of technical equipment, which it considered both vague and inconsistent with budgetary principles.

26. 5 members of the Committee recommended following the proposal of the Secretary General to reimburse the balance of unspent appropriations in 2006 (€ 1.1 M) to member states, and furthermore to allocate 2006 surplus receipts (€ 5.6 M) to the investment account, it being understood that the secretariat of the Pharmacopœia would present a draft pluriannual investment programme to its May 2008 session, and a detailed proposal concerning 2008 covering all needs of the EDQM, to be examined at the October 2007 session of the Budget Committee. This amount would be in addition to the annual grant of € 1.5 M already provided for in the budget.

27. Four members were not in favour of this proposal: the different proposals are summarised below:

    Credit Balance 2006 Proposal of the Secretary General endorsed by 1 member Proposal of 5 members of the Committee Proposal of 4 members of the Committee
    Balance of unspent appropriations: € 1.1 M Reimbursement to member states Reimbursement of member states Reimbursement of member states of an amount equal to their 2006 contributions (€ 4.7 M). Allocation of the balance (€ 2 M) to the investments
    Surplus receipts (€ 5.6 M) Allocation to a reserve fund Allocation to the investments

28. The Committee noted that it was proposed to include in the Pharmacopœia’s main budget a grant of € 800 000 to the “biological standardisation programme” budget as a result of the transfer of activities from the Ordinary Budget in 2007 and from the Partial Agreement in the Social and Public Health Field in 2008 (see paragraph 13 above). The Committee considered that this presentation lacked transparency and that the Secretariat would have to examine the situation during its development of a new structure for the Partial Agreement’s budgets.

29. The Committee was able to recommend the other estimates for expenditure and receipts as presented in document CM(2007)130 Vol. III.

30. To enable the Pharmacopœia to pursue its development, and given that there was no increase in the member states’ contributions, the Committee recommended the staff changes as proposed in the draft budget.

Subsidiary budget – Biological standardisation programme

    Transfer of the “pharmaceutical products” activity

31. The Committee noted that the draft subsidiary budget took account of the expenditure on activities previously incorporated into the Partial Agreement in the Social and Public Health Field, including the cost of two posts (see also paragraph 28 above).

32. It recommended the estimates for expenditure and receipts as presented in document CM(2007)130 Vol. III.

33. It recommended the staff changes as proposed in the draft budget.

Subsidiary budget – Publications, development, certification and conferences

34. The Committee recommended the estimates for expenditure and receipts as presented in document CM(2007)130 Vol. III.

35. It recommended the staff changes as proposed in the draft budget.

    Partial Agreement on the Council of Europe Development Bank

36. The Committee once again examined the question as to whether this partial agreement should be financed in part from the profits made by the Bank, and was informed of an examination by the Bank’s organs of the strategic orientation of the Bank. It examined the legal opinion drawn up, in 1996, by the Legal Counsellor, and which he confirmed in 2006, which declared that such a policy could not be implemented. In the light of this opinion, and subject to any decision which would be taken in the framework of the Council of Europe Development Bank’s on-going strategic review by the Governing Board and Administrative Council to possibly cover part of the costs of the secretariat; the Committee would welcome (unconditional) voluntary financial contributions that the Bank would make to support activities of the Council of Europe which were of mutual interest to the two organisations.

37. The Committee recommended the estimates of expenditure and receipts for 2008 as shown in document CM(2007)130 Vol. III.

    Partial Agreement on the Co-operation Group to combat drug abuse and illicit trafficking in drugs (Pompidou Group)

38. The Committee recommended the estimates of expenditure and receipts for 2008 as shown in document CM(2007)130 Vol. III.

    Partial Agreement on the Co-operation Group for the prevention of, protection against, and organisation of relief in major natural and technological disasters

39. The Committee recommended the estimates of expenditure and receipts for 2008 as shown in document CM(2007)130 Vol. III.

    Partial Agreement on the European Support Fund for the co-production and distribution of creative cinematographic and audio-visual works "Eurimages"

40. The Committee took note of the information provided by the Partial Agreement's secretariat. With regard to the draft budget for 2008, the Committee took note of the receipts proposed for 2008 and the corresponding expenditure as shown in document CM(2007)130 Vol. III.

    Enlarged Agreement on the European Commission for Democracy through Law

41. The Committee recommended the estimates of expenditure and receipts for 2008 as shown in document CM(2007)130 Vol. III.

    Partial Agreement on the Youth Card

42. The Committee recommended the estimates of expenditure and receipts for 2008 as shown in document CM(2007)130 Vol. III.

    Partial Agreement on the European Centre for Modern Languages

43. The Committee recommended the estimates of expenditure and receipts for 2008 as shown in document CM(2007)130 Vol. III.

44. The Committee requested in future that it be provided with a copy of the medium term plan for the activities of the Partial Agreement.

    Partial Agreement establishing the European Centre for Global Interdependence and Solidarity

45. The Committee noted that the increase in the budget was due mainly to changes in appropriations for staff anticipation of the appointment of a new Executive Secretary of the Partial Agreement, an appointment which had not yet been made.

46. The Committee recommended the estimates of expenditure and receipts for 2008 as shown in document CM(2007)130 Vol. III.

    Enlarged Partial Agreement on the “Group of States against Corruption – GRECO”

47. The Committee recommended the estimates of expenditure and receipts for 2008 as shown in document CM(2007)130 Vol. III.

V. MEETING WITH THE INTERNAL AUDITOR ON HIS 2006 REPORT

48. The Committee had an exchange of views with the Internal Auditor on the contents of his Annual Report for 2006.

49. The Committee was informed that there would be a proposal within the draft Ordinary Budget for 2008 for the creation of an audit committee whose functions will be determined by the Committee of Ministers on the basis of a document which it will shortly consider. The Budget Committee stated that it will consider this matter at its October meeting on the basis of this document (see paragraph 11 also).

50. The Committee also expressed the wish that the Internal Auditor ensures that budgetary documents (draft budgets and Programme of Activities) include better justifications and reconcile activities undertaken and the budget (see paragraph 19 also).

VI. ALLOWANCES PAID TO STAFF

51. The Committee had an exchange of views with the Director of Human Resources on the subject of allowances paid to staff and other issues pertaining to the management of human resources.

52.. The Committee observed that, at the present time, there was no definitive information from the Co-ordinating Committee on Remuneration on the level of salary adjustment it would be recommending for 2008. The Committee noted that within the draft budgets for 2008, a provision of 1.8% (being equivalent to the general inflation adjustment which had been applied) had been included in respect of the salary adjustment.

53. The Committee recalled its interest in seeing a medium term expenditure forecast for staff costs.

VII. SITUATION OF THE MANAGEMENT STRUCTURE OF THE PENSION RESERVE FUND

54. The Committee took note of an information document presented by the Director of Finance concerning the current situation of the management structure of the Pension Reserve Fund.

55. The Committee stated that it would like to be kept informed of all future developments relating to the Fund and to this end would include an item relating to the Pension Reserve Fund on its agenda, when it would examine the twice-yearly report of the Pension Reserve Fund Management Board to the Committee of Ministers.

VIII. ANY OTHER BUSINESS

56. The Budget Committee draws the attention of the Committee of Ministers to the existence of observer states who do not contribute financially to the budgets of the partial agreements even though they had been members for a long time and their financial situation presented no particular difficulty.
Appendix I

BUDGET COMMITTEE

September session 2007

Monday 10 September at 9 a.m. – Thursday 13 September 2007

Room 7, Palais de l’Europe

DRAFT AGENDA

Item 1 Opening of the meeting

      - report of the May 2007 meeting

      CM(2007)72: Meeting report of the Budget Committee – May 2007 session

      - minutes of the May 2007 meeting

      P-Bud(2007)CR1: Minutes of the May 2007 session

Item 2 Presentation of the budgetary context for 2008

      CM(2007)49: Priorities for 2008 – Budgetary implications
      CM/Del/Dec(2007)1001/1.6: Priorities for 2008 – Budgetary implications

Item 3 Meeting with the External Auditor on the 2006 accounts

      CM(2007)100: Financial statements of the Council of Europe for the year ended 31 December 2006 and Report of the External Auditor
      CM(2007)101: Accounts of the Partial Agreement establishing the European Centre for Global Interdependence and Solidarity for the year ended 31 December 2006
      CM(2007)102: Accounts of the Partial Agreement of the European Support Fund for the co-production and distribution of creative cinematographic and audio-visual works "EURIMAGES" for the year ended 31 December 2006
      CM(2007)103: External Auditor's Report 2006 – Comments by the Secretary General

Item 4 Budgets of the Partial Agreements for 2008

      CM(2007)130, Vol III: Draft budget for 2008 – Budgets of the Partial Agreements
      Greco (2007)15: Draft budget for 2008 of the Enlarged Partial Agreement on the ''Group of States against Corruption - GRECO''
      NS/Bud/2008: Draft budget for 2008 of the Partial Agreement establishing the European Centre for Global Interdependence and Solidarity
      P-Bud(2007)5: Budgetary Accounts of the Pharmacopœia for 2004, 2005 and 2006
      P-Bud(2007)6: Pharmacopœia Estimated Balance Sheet as at 31 December 2006
      P-Bud(2007)7: Future development of the EDQM –The EDQM budget for 2008-2010

Item 5 Meeting with the Internal Auditor on his 2006 report

      GR-AB(2007)9: Annual Report 2006 of the Directorate of Internal Audit

Item 6 Allowances paid to staff

      P-Bud(2007)8: Supplementary information concerning allowances paid to the Organisation’s staff

Item 7 Situation of the management structure of the Pension Reserve Fund

      P-Bud(2007)9: Situation of the management structure of the Pension Reserve Fund

Item 8 Any other business

Additional Information Documents:

Title of Document

SG/Inf(2007)4: Building on our Strengths: Eight initiatives to shape the Council of Europe for the future - Towards a Medium-term Strategy

P-Bud(2007)10: Draft Budget 2008 – Partial Agreements Summary Tables by Accounting Code
P-Bud(2007)11: Draft Budget 2008 – Partial Agreements - Expenditure and Receipts by Accounting Code – Detailed Tables
P-Bud(2007)12: Budgetary Situation of the Partial Agreements as at 31 August 2007
ETS no. 050: Convention on the Elaboration of a European Pharmacopœia
Information concerning input to the discussion on the CEB’s Strategic Review, submitted by Mr Michael Laumanns
Table - European Pharmacopœia Consolidated Budgets

Appendix II

BUDGET COMMITTEE

September session 2007

(10-13 September 2007)

LIST OF PARTICIPANTS

STATES MEMBERS
Austria Mr Bruno WALDERT
Belgium Ms Anne VAN NIEUWENBURG
France Ms Marie-Chantal MUSSET (President)
Germany Mr Michael LAUMANNS (Substitute)
Italy Mr Claudio DE ROSE
Poland Ms Katarzyna DZIAMARA-RZUCIDLO
Romania Mr Stefan PETRESCU
Russian Federation Mr Nikolai LOZINSKY (Substitute)
Sweden Mr Åke HJALMARSSON
Turkey Mr Fikret Demir (apologies for absence)
United Kingdom Ms Joycelyn BUCHAN



*out of which € 1 080 629 in respect of unspent appropriations and € 5 638 630 in respect of excess receipts to be allocated to the special account for investments

Note 1 This document has been classified restricted at the date of issue; it will be declassified in accordance with Resolution Res(2001)6 on access to Council of Europe documents..


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