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CM(2010)123 23 September 20101

1099 Meeting, 23-25 November 2010
11 Administration and Logistics

11.1 Meeting report of the Budget Committee – September 2010 session

For consideration by the GR-PBA at its meeting of 14 October 2010
____________________

1. The Budget Committee met in Strasbourg on 13-17 September 2010.

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

I. OPENING OF THE MEETING

1. The Chairperson opened the meeting.

Report of the May 2010 meeting

2. The Committee took note of the report of the May 2010 meeting.

Minutes of the May 2010 meeting

3. The Committee examined and approved the minutes of the May 2010 meeting.

II. IMPLEMENTATION OF THE REFORM OF THE ORGANISATION

4. Following on from the exchange of views he had had with the Committee in May 2010 on the reform of the Organisation, the Secretary General's Special Representative for Organisational Development and Reform - Mr Stoudmann - updated the Committee on the reform process.

5. He said that the changes that had already been made were only a first stage and a second series of proposals was being prepared and would be finalised for the end of 2010 / beginning of 2011. Concerning the Organisation's programme and budget, he stressed that activities would have to be reviewed so as to preserve only those that could have a real impact in the member states. In that respect, it was essential that activities should reach a certain critical mass and demonstrate their operational nature. This review would take place in the context of a two-year programme and budget, which would in particular offer the advantage of allowing all decision-making bodies to devote more time to the analysis of the substance of activities and of the results actually achieved.

6. In addition, the Director General of Administration and Logistics - Mr Martins - presented the measures adopted or being examined in the sphere of human resources policy, which were intended to foster internal mobility, increase flexibility, simplify procedures and contain staff expenditure. (see paragraph 15 page 4)

7. The Committee took note of this information and welcomed the recent developments. It considered that staff mobility was an important point and must be coupled with appropriate in-service training for staff. In this connection, it welcomed the proposal to increase the training budget by 100 000€ (+10%) to an amount of 1 095 700€ (0.7% of the wage bill).

8. The Committee decided to examine the subject of the two-year budget at its October meeting.

III. PRESENTATION OF THE BUDGETARY CONTEXT FOR 2011

    9. The Director General of Administration and Logistics informed the Committee of the most recent developments concerning the budgetary context for 2011. He stated that the draft programme and budget for 2011 had been prepared in accordance with the document on priorities (CM(2010)42rev) updated to take account of the decisions taken by the Committee of Ministers since May 2010. Namely, that the 2009 credit balance was not reused, inflation was calculated according to the usual method and the negative reserve had been reduced. In relation to the initial proposals set out in the priorities document, additional cuts had been made of €125 000 in the logistics programme and €105 000 in the "Communication" programme following an analysis of this sector's working methods.

    10. The salary adjustments included in the draft programme and budget had been calculated at a rate of 0.2% (for staff based in France) based on the most recent information available from the Co-ordinating Committee on Remuneration (CCR). The final data from the CCR would only be published later in the budget process. (see paragraph 14 below)

III. DRAFT PROGRAMME AND BUDGET FOR 2011 (GENERAL BUDGET AND BUDGETS OF THE PARTIAL AGREEMENTS)

    General Remarks of the Budget Committee on the draft Programme and Budget for 2011

General Budget Framework

11. The Committee took note of the decisions of the Committee of Ministers in respect of the programme and budget for 2011 which had been taken following the discussions on the priorities document. The Committee welcomed the fact that the Committee of Ministers had taken these decisions prior to the summer in accordance with the established budgetary calendar and noted that the draft programme and budget complied with them.

12. The Committee noted that member states contributions to the Ordinary budget for 2011 increased by 0.2% in accordance with the decision taken by the Minister’s Deputies on 30 June 2010. However, the member states’ contributions to the Pension Reserve Fund represented an increase of 1.9%, i.e. 727 100€ in accordance with the last actuarial report and the Fund’s statute. In addition, the adjustment resulting from calculations following the final CCR recommendation on the salary adjustment for 2011 would be taken into account.

13. The Committee also noted that, due to the fact that the Secretary General no longer proposed to include within the budget of receipts credit balances from previous years, the budget of expenditure of the ordinary budget would decrease by € 1.3M (-0.6%) from 218.3M€ to 217 M€.

14. The Committee noted that the Secretary General proposed in the the draft programme and budget that the negative reserve be reduced and noted that it was its intention to further reduce it if the CCR recommendation on the salary adjustment for 2011 was less than the 0.2% already included as a provision.

Staff Costs

15. The Committee commended the Secretary General’s intention to achieve a balanced staff cost structure for the Organisation and the measures already taken or being discussed in this respect (doubling the period for the allocation of steps, suppression or review of certain allowances, lowering the step at which new staff are appointed to the lowest step in the grade, with possible exceptions). The Committee also took note of the suppression of 16 posts and of staff appropriations corresponding to 5 positions in the Ordinary budget. In addition, the Committee noted the transfer from the ordinary budget to the European Youth Foundation of 4 posts and the redeployment within the ordinary budget to the office of the Commissioner for human rights of 2 posts.

16. Given that the staff cost ratio was increasing in the draft budget, the Committee recommended that the Secretary General continue to take measures to contain staff expenditure and to adapt the structure of the Organisation in the context of the reform undertaken in all the sectors.

Pensions

17. In this context, the Committee recalled its recommendation made at its September 2009 meeting concerning the possible introduction by the Organisation of a third pension scheme which would be less costly for the Organisation.

Presentation of the document

18. The Committee welcomed the revised presentation of the draft programme and budget document as it sets out clearly the strategic objectives of the organisation in one easily assimilated document.

19. However, the Committee felt that additional information in respect of significant changes in budget allocations should be included in the draft programme and budget document and recommended that a table such as that contained in GR-PBA(2010)6 (Ordinary budget variances report between the 2010 and 2011 budget) be included in future years.

20. The Committee stressed that there still needed to be improvements in terms of the expected results (logframes) and performance indicators related to the desired external impact in some logframes. In particular the Committee stated that activities in themselves, such as the preparation of meetings, should not be included as performance indicators.

EXAMINATION OF THE 2011 DRAFT PROGRAMME AND BUDGET

21. The Budget Committee stressed that during the programme and budget examination, it took into account not only the appropriations in the budgets but also the financial resources from joint programmes and voluntary contributions. In this respect it would study at its October 2010 meeting their impact on the general expenditure of the Organisation.

    22. In accordance with the methodology adopted for the examination of the draft programme and budget in previous years, the Committee invited certain budget holders to the meeting in order to present their budget and programme for 2011. The programmes concerned are detailed below together with specific comments which the Committee made.

European Court of Human Rights

    23. The Registrar - Mr Fribergh - gave information to the Committee on the latest developments in respect of the follow up to the Interlaken Declaration, the entry into force of protocol 14 and outlined the Court’s position in relation to the 2011 budget, in particular that:

        Ø The Committee of Ministers had set up a Working group to monitor and supervise the follow up to the Interlaken Conference and implementation of the Action Plan.

        Ø As Protocol 14 had only been in force for just over 3 months it was not possible to fully assess its impact.

        Ø The Interlaken Declaration expressly encouraged prioritisation which meant that fewer resources are being devoted to the “straightforward cases” – the cases on which Protocol 14 was intended to have the most impact.

        Ø With the current staff resources at the disposal of the Court, it was not possible to achieve a balance between incoming and outgoing cases and reduce the backlog as called for in the Interlaken Declaration.

        Ø Reducing IT investment was a false economy as the potential efficiency gains from using IT solutions could be significant.

        Ø As the Court’s requests for additional funding on certain budget lines (IT, recruitment and judges removals) were not included in the draft programme and budget for 2011, the Court would have to finance any such increases within the allocated budget.

        Ø In order to finance work on the HUDOC data base of Convention Case Law the court would be seeking voluntary contributions.

24. Given the important changes currently underway at the Court, the Committee assumed that there would be no substantial increase in the staff resources in the near future.

25. In respect of the requests for additional funding for Information Technology the Committee supported the efforts of the Court to finance certain projects by seeking voluntary contributions. In the view of the Committee, this kind of approach was appropriate for financing one-off projects.

26. The Committee recommended the budget of this programme for 2011 as it appears in CM(2010)130.

Independence and Efficiency of Justice

27. The Committee held an exchange of views with the Secretariat of this Programme - Mr Koedjikov - and recommended the budget of this programme for 2011 as it appears in CM(2010)130.

Congress of Local and Regional Authorities

    28. The Committee held an exchange of views with the Secretary General of the Congress - Mr. Kieffer.

    29. The Committee took note that the Congress had initiated a reform process, the main aim of which is to focus the Congress's activities more effectively on its institutional and political role in the field of protecting and promoting local and regional democracy in Europe.

    30. The Committee recommended that the expected results and performance indicators for the Congress be reviewed and improved in future documents.

    31. The Committee recommended the budget of this programme for 2011 as it appears in CM(2010)130.

Youth Participation and Citizenship – EYF (European Youth Foundation) – Youth Mobility through the Youth Card

Youth participation and citizenship (Ordinary Budget)

32. The Committee took note that this programme had been reduced by a net amount of € 321 200, corresponding to a € 464 200 decrease in staff expenditure, following the transfer of four posts from the Ordinary Budget to the EYF and the suppression of a category B post, offset by an increase in operational expenditure of € 143 000, principally corresponding to a redeployment of resources to the new "peace ambassadors" activity (€ 115 000).

European Youth Foundation (EYF)

33. The Committee took note of the significant increase in the number of youth activities supported by the Foundation between 2008 and 2010.

34. The Committee noted that the EYF's budget, as proposed in document CM(2010)130, remained stable and that, following the transfer of four posts from the Ordinary Budget to the EYF for an amount of € 391 900 (as mentioned above), the programme had been reduced by an equivalent amount.

European Youth Centres (EYC)

35. The Committee took note that the European Youth Centres' accommodation receipts had increased significantly between 2008 and 2009 and that at the end of the 2009 financial year the excess receipts from self-financed activities had been transferred to a special account, as provided for in the 2009 budget.

Youth Mobility through the Youth Card

36. With regard to the Partial Agreement on Youth Mobility through the Youth Card, the Committee noted that the Secretariat was composed of 25% of a B-grade post for an operational budget of € 68 600. It wondered whether this partial agreement was of a sufficient critical mass to have a real impact. It recommended that an evaluation of the results achieved and of the partial agreement's impact be undertaken.

37. On the basis of the information provided, the Committee recommended the budgets for 2011 of the above programmes as set out in document CM(2010)130.

Communication

    38. The Committee held an exchange of views with the new Director of Communication - Mr. Höltgen.

    39. The Committee noted that the Communication budget had been reduced in comparison with 2010 and that €225 000 had been transferred to the programme for External Presence as part of the reform of this sector. The Committee was of the opinion that one of the priorities of the new director should be to examine how the various communication events within the Organisation could be better co-ordinated and assess whether this could lead to budget savings in future.

    40. The Committee recommended the budget of this programme for 2011 as it appears in CM(2010)130.

Information Technologies

41. The Committee held an exchange of views with the newly appointed Director of Information Technology - Mr Skouras - and his predecessor – Mr Dangel.

42. The Committee noted that within the Investment Programme of the Organisation there was a programme related to the renewal of the Enterprise Resource Planning (ERP) systems of this Organisation. Given that this was a strategically important project with a significant cost, the Committee asked to be kept regularly informed in respect of its progress.

43. The Committee recommended the budget of this programme for 2011 as it appears in CM(2010)130.

Commissionner for Human Rights

44. The Committee held an exchange of views with the Director of the Office of the Commissioner – Ms Gachet.

45. The Committee noted that following the redeployment of two posts to the office of the Commissioner which was proposed for 2011, the staffing of the office of the Commissioner would be 21 permanent posts and 3 positions. Four national civil servants worked in the office as seconded officials.

46. The Committee also took note of the fact that the Commissioner estimated that 30 staff members were required for his office in order for him to fully fulfill his mandate.

47. The Committee recommended the budget of this programme for 2011 as it appears in CM(2010)130.

EDQM (Pharmacopoeia)

    48. The Committee held an exchange of views with the Director of the EDQM – Ms Keitel - on the programme and budget for 2011 and the requests for the creation of 10 additional posts.

    49. The Committee recommended, in the light of the comments made by the external auditor, that the EDQM establish at the start of 2011 a medium term strategy and also stressed the need to develop as soon as possible a cost accounting system. It also recommended that the EDQM take action on all the other recommendations made by the external auditor.

    50. The Committee was of the opinion that at least one post at administrator level should be created as a matter of priority within the EDQM in order to implement the recommendations of the external auditor in respect of financial management (cost accounting, preparation and supervision of the budget…).

    51. Concerning the request for the creation of posts, the Committee considered the creation of 5 posts2, to be filled by staff recruited on fixed-term contracts of a maximum of 5 years, sufficient while awaiting the development of the medium-term strategy, given that 8 posts were not yet filled.

    52. On the basis of additional financial information presented to it during an exchange views with the Director of the EDQM, the Committee concluded that the financial position of the EDQM was strong and better than that foreseen the previous year.

    53. The Committee noted that the 2011 draft programme and budget proposed that the total amount of contributions of member States to the budget of the EDQM be maintained at the same nominal level for the fourth year running and that an amount equal to the total of contributions for 2011, i.e. €2.8M, would be returned to member states from the credit balance on the 2009 budget.

    54. Furthermore the Committee recalled its recommendation made during the meeting of September 2009:

“The Committee recalled that in 2009 an amount of €3.0M had been reimbursed to member states from the accumulated reserves of the EDQM at the end of the financial year 2007 which some member states had used in order to offset to some extent the increase in contributions to the pension reserve fund in respect of the Financial year 2009. After having analysed the current and forecast financial situation of the EDQM for 2010, a similar operation could be considered by the Committee of Ministers in its composition restricted to the Representatives of the States Parties to the Convention on the elaboration of a European Pharmacopoeia for 2010 during the process of the adoption of the accounts for 2008. The Committee was of the opinion however that it would be possible to reimburse for 2010 no less than €1.5M and no more than €2.0M to member states of the EDQM. The Committee wanted to underline the fact that such an operation could not be reused systematically.” Para 22 CM(2009) 131.

    55. The Committee noted that during the debate on the budget in 2010, the Committee of Ministers had decided that an amount of € 1.0M would be reimbursed to member States. In the light of the above elements, the Committee was of the opinion that it would again be possible to reimburse for 2011 an amount between € 1.5 M and € 2 M to member states of the EDQM.

    56. The Committee took note that the former EDQM building (Meinau building) was for sale.

    57. Furthermore, it recommended that the special account in respect of the new EDQM building be closed as soon as possible as requested by the external auditor.

58. Subject to the remarks above, the Committee recommended the budget of this programme for 2011, as modified to take into account the financial effect of reducing the number of posts to be created, and adapted to take into account the implementation of the measures recommended by the external auditor.

59. The Committee recommended the proposed investment Programme for 2011 which totalled €2 500 000. It recommended however that priority be given if necessary to financial management tools.

60. In this respect, the Committee invited the EDQM to draw as a rule on the skills and competencies of the DGAL.

Partial agreement on the Council of Europe Development Bank

61. The Committee took note of the information presented by the Head of the Secretariat – Ms Pajardi - on the trend in the Partial Agreement's situation, which had been discussed at length during the 2010 budgetary discussions.

62. The Committee noted that, in 2011, the Partial Agreement's budget included a grant of € 33 000 from the CEB to cover translations undertaken by the translation service of the Council of Europe of certain documents of the CEB.

63. With regard to the logframe, the Committee considered that an effort should be made to propose more tangible expected results.

64. On the basis of the information provided, the Committee recommended the budget of this programme for 2011 as it appears in CM(2010)130.

Investments

65. The Committee recommended the proposed investment programme financed by the Ordinary budget for 2011, which totalled € 5 165 000 of which € 500 000 were intended for the European Court of Human Rights.

Pensions

66. The Committee noted that in future programmes and budgets the Secretariat intended to implement the external auditors' recommendation that the Organisation's various budgets should be made comparable by standardising the treatment of pensions expenditure (CM(2010)100, paragraph 136). Under the revised presentation, pensions expenditure would be included in all the budgets following a methodology similar to that used for the partial agreements. The Committee of Minister’s attention was drawn to the fact that this presentation would lead to a significant increase in the amount of member States’ contributions to the Ordinary Budget for the 2012 financial year and would reduce by an equivalent amount the contributions in respect of the Pension Reserve Fund.

IV. FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2009

67. The Committee decided to come back to the recommendations made in the audit report at its October 2010 meeting following its exchange of views with the Cour des Comptes.

V. ANY OTHER BUSINESS

Rates of honoraria and other allowances

68. The Committee noted that it was proposed to keep the rates of honoraria and other allowances for 2011 (table 17, page 207 document CM(2010)130) at the same amount as in 2010.

VII. DATES OF THE NEXT MEETINGS

12 – 15 October 2010.

Appendix I

BUDGET COMMITTEE

September session 2010

Monday 13 September 2010 at 9.00 a.m. – Friday 17 September 2010

Room 7, Palais de l’Europe

REVISED DRAFT AGENDA

Item 1 Opening of the meeting

        - Report of the May 2010 meeting

          CM(2010)60: Meeting report of the Budget Committee –May 2010 session

        - Minutes of May 2010 meeting

          P-Bud(2010)CR1: minutes of May 2010 meeting

Item 2 Implementation of the reform of the Organisation

Item 3 Presentation of the budgetary context for 2011

Item 4 Draft programme and budget for 2011 (General Budget and budgets of the Partial agreements)

    CM(2010)130: Council of Europe Draft Programme and Budget 2011

General discussion on budgetary aspects of the document

Detailed review of some programmes and expenditure3 :

        - European Court of Human Rights: Follow up of Interlaken Conference
        - Independence and Efficiency of Justice
        - Congress of Local and Regional Authorities
        - Youth Participation and Citizenship – EYF - Youth Mobility through the Youth Card
        - Communication
        - Information Technologies
        - EDQM (Pharmacopoeia)
        - Partial agreement on the Council of Europe Development Bank
        - Investments
        - Pensions
        - Evolution of salary costs
        - Human Right Commissioner

Item 5 Financial statements for the year ended 31 December 2009

Item 6 Any other business

Additional Information Documents:

    Title of Document

    Extracts of the financial regulation concerning the mandate of the Budget Committee

    P-Bud(2010)10rev: Draft Programme and Budget 2011 / Expenditure and Receipts by Accounting code – Detailed Tables

    P-Bud(2010)13: Additional information in relation to staff expenditure

    EDQM – additional informations

    European court of Human Rights – Statistics

Appendix II

BUDGET COMMITTEE

September session 2010

(13-17 September 2010)

LIST OF PARTICIPANTS

STATES

MEMBERS

Austria

Mr Christoph JACKWERTH

Belgium

Mr Arie GEENS (Substitute)

France

Ms Marie-Chantal MUSSET (Chair)

Germany

Mr Michael LAUMANNS (Substitute)

Italy

Mr Claudio DE ROSE

Poland

Mr Bartosz BURACZYŃSKI (Substitute)

Romania

Mr Stefan PETRESCU

Russian Federation

Mr Andrei Vitalievitch KOVALENKO

Sweden

Mr Åke HJALMARSSON (Vice Chair)

Turkey

Mr Fikret DEMIR

United Kingdom

Ms Joycelyn BUCHAN

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.
Note 2 Including the post of administrator specialised in finance as mentionned above
Note 3 Exchanges of views have been organised with those responsible for the budgets in agreement with the Chair of the Committee. Members of the Committee are reminded that the fact that the person responsible for a programme has not been invited to a meeting does not indicate that this budget will not be discussed by the Committee. Additional meetings can be scheduled according to specific requirements and available time. As far as possible, members of the Committee are requested to contact the Secretariat before the beginning of the meeting in order to organise new meetings.


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