CM(2004)192 2 November 2004
905 Meeting, 30 November, 1 and 2 December 2004
11 Administration and Logistics
11.1 Meeting report of the Budget Committee – October 2004 session
1. The Budget Committee met in Strasbourg on 18-22 October 2004.
2. The Committee considered the following items:
I. Opening of the meeting
II. Statement of the Director General of Administration and Logistics
III. Examination of the Draft Budgets 2005
IV. Exchange of Views with the Group of Rapporteurs on Administrative and Budgetary Questions (GR-AB)
V. Exchange of Views with the External Auditors (Mr Graham Miller – Director, United Kingdom National Audit Office)
VI. Externally Financed Projects
VII. Any other business
3. The agenda of the meeting appears in Appendix I and the list of participants in Appendix II.
I. OPENING OF THE MEETING
EXAMINATION OF THE REPORT AND MINUTES OF THE SEPTEMBER 2004 MEETING
4. The Committee examined and approved the report and the minutes of the meeting held in September 2004.
II. STATEMENT BY THE DIRECTOR GENERAL OF ADMINISTRATION AND LOGISTICS
5. The Committee took note of the statement by the Director General of Administration and Logistics.
III. EXAMINATION OF THE DRAFT BUDGETS 2005
DRAFT BUDGET FOR 2005 – GENERAL BUDGET
6. The Committee noted that the draft Ordinary Budget document for 2005 had been prepared in conformity with the decisions taken by the Ministers Deputies on 13 July 2004 (893rd meeting – Item 1.5). The Committee wished to draw the attention to the Committee of Ministers to the table on page v of the draft budget document (CM(2004)155, Vol. I) which reconciled the figures contained in the priorities document CM(2004)59 to the final figures contained in the draft budget.
7. The Committee noted that the draft budget as presented included the proposals in relation to the extension to all member states of certain activities of the Partial Agreement in the Social and Public Health Field and the possible change in the system of social cover for the Judges of the European Court of Human Rights.
8. The Committee was informed that it appeared unlikely that there would be a definitive decision on these two proposals prior to the adoption of the Draft Budget 2005. The Committee noted that in the event that there was no decision relating to these matters then the revised proposal of the Secretary General might possibly be as follows:
9. Partial Agreement in the Social and Public Health Field: continuation of the existing situation and budgetary structure of the Partial Agreement (i.e. the activity in relation to the rehabilitation and reintegration of people with disabilities remain with the Partial Agreement budget for 2005).
10. Social Cover of Judges: possible inclusion, within the budget, of the appropriations already proposed for the possible change in the system of the social cover of the Judges but these appropriations to be frozen pending a decision on the matter by the Ministers Deputies.
11. The Committees recommendations on these two particular proposals can be found in paragraphs 71 and 47 below.
12. The Committee felt that the draft budget document should also contain a table giving an overview of the draft budget by vote and by type of expenditure. The Committee drew up such a table, which can be found at Appendix III to this document. The Secretariat undertook to include this table in future draft budgets.
13. It also requested that an analysis be made of the differences between 2004 and 2005, taking into account items of expenditure which were not present in 2004 (Appendix IV). The Committee noted that the total expenditure authorisations increased by 3.6% and total expenditure adjusted for exceptional items increased by 1.88%.
14. The Committee recommended that the future Budget Committee may make use of the analysis in Appendix III to undertake an examination of particular types of expenditure.
15. The Committee noted with concern that the draft budget did not include a specific provision to cover expenses related to the organisation of the 3rd Summit.
16. During its exchange of views with the GR-AB, the Committee was informed that there was as yet no consensus in the Committee of Ministers as to the ceiling for the 2005 Ordinary Budget.
17. In these circumstances, the Committee wished to recall the recommendation it had made at its May 2004 meeting that the draft budget for 2005 should be prepared on the basis of zero nominal growth.
18. Such a policy would require significant reductions in the proposals in the 2005 budget. The Committee had already indicated in the report of its September 2003 meeting (CM(2003)121) that:
“draconian cuts in the budget could only be made by making hard decisions leading to the adoption of draconian measures. These could include:
- Clear decisions on the core activities of the Organisation with a view to prioritising, reducing or eliminating the others.
- Freezing salaries […] perhaps moving along the path of zero nominal growth.
- Cuts in staff.
- Percentage cut across the board.
- Rationalisation of working methods.
- Sunsetting projects and programmes no longer needed.
- Eliminating, if any, duplication with other international organisations.”
19. The Committee was conscious of the fact that this would require difficult decisions of a political nature to be taken by the Committee of Ministers.
20. The Committee was of the opinion, however, that it was possible to achieve reductions in the total of member states' contributions in 2005 by means of adjustments which would not, in practice, have a detrimental effect on the level of resources which the Organisation could effectively use.
21. In particular, the Committee referred to its examination of the proposals for the 2005 budget of the European Court of Human Rights (see paragraphs 33 to 50 below) and recommended that the Committee of Ministers may wish to review the level of the additional resources it was proposed to place at the disposal of the European Court of Human Rights in 2005 in the light of its remarks.
22. In recognition of the fact that the change in presentation of the draft budget under a Results Based Budgeting format meant that the focus of the budget was now on the achievement of results and the measurement of the attainment of those results, the Committee had invited the budget holders from all administrative units of the Organisation to attend its meeting in order to present their first draft budgets under the Results Based Budgeting format.
23. Whilst welcoming and recognising the huge steps that the Organisation had taken in introducing Results Based Budgeting to the whole of the Ordinary Budget and the Partial Agreements, in accordance with its recommendations, the Committee noted certain areas where improvements could be made in Objective Setting and the definition of Performance Indicators.
24. The Committee noted that, in many Logframes, Performance Indicators were not sufficiently well quantified and that this was an area that must be improved for coming years. This aspect should also be integrated in the reports on the implementation of the 2005 budget. The Committee stressed that in order to be able to measure results it was important to have benchmark figures against which to draw conclusions regarding performance or indeed the level of appropriations required to achieve expected results. The Committee highlighted that non-achievement against certain performance indicators should not always be regarded negatively but that the importance of Results Based Budgeting was that it obliged budget holders to critically analyse results in a given financial year and report on their achievement or non-achievement. Formal reporting on the results would give budget holders the opportunity to provide details of variances between objectives and actual results and how these may be brought in line in future years.
25. Whilst the Committee did not examine in detail the Logframes contained within the Programme of Activities (Vote II), it felt that its general remarks regarding the definition of expected results and Performance Indicators applied equally to the Programme of Activities.
26. The Committee requested the Secretariat to take note of all the specific comments which it made on the content of individual Logframes in order that these could be taken into account when the 2006 draft budget document was being prepared.
27. The Committee questioned the indicator appearing in all of the Logframes stating that “99% of financial resources are utilised in financial year”. Whilst recognising that this performance indicator is quantified, the Committee draws attention to the fact that there is not necessarily a correlation between the fact that 99% of the allocations have been consumed and that the expected results achieved. The Committee expects Directorates to put more emphasis on the achievement of expected results in the most efficient manner.
Directorate of Communication and Research
28. Whilst welcoming the significant cuts and subsequent re-deployment of resources to priority areas of the Organisation, the Committee noted that an amount of € 500 000 was included in the budget in relation to Press Relations. The Committee suggested that the future Budget Committee might consider examining this budget line in further detail.
29. One Committee member questioned the usefulness of maintaining a network of Council of Europe News Correspondents and pointed out that economies could be found already in 2005 by the rationalisation of the use of information offices.
Directorate General of Political Affairs
30. Whilst not questioning the political validity of the Organisation's presence in the field, as detailed in the Programme “Field Support”, the Committee suggested that the future Budget Committee might wish to consider examining the budgetary and administrative aspects of these activities.
31. One member pointed out that economies could already be identified in the course of the examination of the 2005 budget.
32. In relation to Vote II, the Committee noted that, in accordance with the proposals in CM(2004)59, the budget of the Directorate of Strategic Planning and the Commissioner of Human Rights had been transferred from Vote I to Vote II. The Committee also noted that Logframes in relation to the management function of the Directorate of Strategic Planning and the central management functions within the Operational Directorates (Directorates General I to IV) ( CM(2004)115 Vol. II pages 247 to 256) had been prepared using the Results Based Budgeting format, which differed very slightly from the Presentation under Project Management Methodology, which is applicable to all other programmes and projects within the Programme of Activities.
Vote IV – European Court of Human Rights
33. During an examination of the proposals for the 2005 budget of the European Court of Human Rights in consultation with representatives of the Registry of the Court, the Committee undertook an in-depth review of the present situation.
34. The financial year 2005 was to be the final year of the three year programme of enhancement of the resources of the Court. Additional resources had been granted to the Court in 2003 and 2004 of € 7 Million and € 11 Million respectively.
35. The Committee noted with disappointment, however, that an amount of € 1.99 Million had remained unspent on the 2003 budget of the Court and that the most recent forecasts of the Court in relation to 2004 indicated that there would be an unspent balance of approximately € 2.2 Million at the end of the year. This led the Committee to believe that the additional resources so far granted to the Court had been too high for the Court effectively to use in full.
36. Furthermore, the Court had remarked in its requests for the 2005 budget (Court document “Budget Requests 2005” of 21 September 2004, page 4) that “the Registry has a serious shortage of office space. This means that the Court cannot easily recruit extra temporary staff even if its budget would permit it”.
37. The Committee also noted the information contained in document SG/Com(2004)899 concerning the Internal Auditor's assessment of the future requirements of the Court from 2006 onwards, and that this assessment did not take account of the effect of Protocol No. 14.
38. With regard to Protocol No. 14, the Committee pointed out that it had recommended implementation of the plan to enhance the resources of the Court pending a modification of the Convention which could lead to a substantial reduction in the Court's caseload. The Committee wished to draw to the attention of the Committee of Ministers the fact that the Court Registry did not expect that the changes to be brought about by the entry into force of Protocol No. 14 would result in a significant reduction in the number of applications to be processed.
39. The Committee also found it surprising that there had been no assessment of the financial implications of Protocol No. 14, particularly as a proposal of this type ought to have included details of its financial implications before being submitted to the decision-making bodies.
40. During an exchange of views, Mr Graham Miller, Director of the United Kingdom National Audit Office (NAO), confirmed to the Committee that the NAO had been requested by the Secretary General to carry out a review in order to provide an independent validation of the Internal Auditor's assessment.
41. It was clear to the Committee that, under present circumstances and without changes in the working practices of the Court, there would be an ongoing requirement from 2006 onwards for permanent additional resources for the Court. Given that these additional resources would comprise essentially lawyers, secretaries and support staff in significant numbers this would give rise to further serious financial consequences together with the need to provide office accommodation and facilities, not to speak of logistical support for their recruitment.
42. The Committee requested that a comprehensive, fully costed programme on the future requirements of the Court be drawn up and submitted for its examination.
43. Pending this programme, and in the light of the obvious current overprovision of resources in the budget of the Court, the Committee was of the opinion that the Court's budget should be maintained in 2005 at the 2004 level in real terms. It could not, therefore, recommend the creation of the additional 28 posts requested for 2005. The Committee therefore recommended that the total appropriation under Vote IV be reduced by € 1 555 100 (including € 126 000 in respect of the purchasing of 28 new work stations in the budget of investment of the Court).
44. As regards the proposal that the posts created in the 2003-2005 programme should be made permanent, the Committee recognised that there would be an ongoing requirement for additional staff after 2006 and that the present situation under which the posts were approved only until 31 December 2005 created practical problems. The Committee wished to examine the programme for the future requirements of the Court before making a definitive recommendation on this proposal, but could in the meantime agree to an extension of these posts until 31 December 2006. This proposal would enable the Court to derive optimum benefit from the experience gained by the staff members already recruited and to release longer-serving staff from their training duties.
45. The Committee further noted from the Court's document “Budget Requests 2005” of 21 September 2004 (page 4), that there was a surplus in the Court's 2004 budget of € 210 000 in respect of five posts which had been frozen pending an eventual decision of the Court to create a fifth section. If such a decision would not be taken in the near future, the Committee recommended that these appropriations be deleted from the Court's budget and member states' contributions reduced accordingly (full year equivalent in 2005 of € 403 500).
Judges Social Cover and adjustment of emoluments
46. The Committee noted that the draft Budget contained appropriations of € 702 500 (Vote IV, Sub-head 1-quater) in respect of Judges Social Cover and € 168 500 Provision for adjustment of emoluments for the judges (Vote VII - Sub-head VII).
47. In this respect the Committee reiterated its position on the social protection of the Judges (medical cover and pension contributions) and on the proposal for the adjustment of the emoluments of the Judges as set out in its report of its May meeting. It recalled that the annual emoluments of the judges should be an annual fixed sum made of the following elements:
- basic salary (equivalent to the average of A7),
- social charges (medical cover, pension contributions).
48. Judges Social Cover: CM(2004)94 (para 40)
“The Committee indicated that its point of view had changed little, if at all, since 1997 and that for this reason it could recommend neither the proposal of the Secretary General nor that of the judges. Consequently, it believed that it was necessary to increase the annual remuneration of judges by € 15 000 as from 2005 in order to come back in line with its initial proposals, all other conditions remaining the same, with the exception of the method of adjusting remuneration.”
49. Method of adjustment of remuneration: CM(2004)94 (para 42)
“In consequence, it proposed that the remuneration of judges should no longer be adjusted as a function of inflation in the host country, but rather in line with the adjustment of staff salaries. This change should come into force after a final adjustment of judges' salaries in accordance with the present methodology.”
Investment Budget of the Court
50. The Committee noted that the Investment Budget of the Court provided for the replacement of computer workstations every three years, whereas the Investment programme of the rest of the Organisation foresaw a replacement of computer workstations every four years. Consequently, the Committee recommended that the replacement cycle of computer workstations at the Court be extended to four years and that this budget be therefore reduced by € 224 000.
51. The Committee recommended that the Investment Programme of the Court should no longer be prepared as a separate exercise but rather be included within the Medium Term Investment Plan of the whole Organisation.
52. In reviewing the structure of the Central Management Section of this Directorate General, the Committee recommended that a study be made in relation to delegation of authority within the Directorate.
53. In examining the Logframes of the Finance Directorate, the Committee noted that the timely payment of suppliers depended also upon contracting administrative Units processing invoices in an efficient and effective manner. The Committee recommended that in future, in accordance with the spirit of decentralised financial management, all administrative units should have an expected result in relation to the processing of payment instructions in order that the complete chain of financial payments be covered by expected results and performance indicators.
Investment budget and Medium Term Investment Plan
54. The Committee examined document P-Bud(2004)8 on the Medium Term Investment Plan 2005-2009.
55. The Committee welcomed the fact that for the first time the Committee had been provided with such a plan and that a defined system for the evaluation and selection of Investment projects had been put into place.
56. The Committee wished to draw the attention of the Committee of Ministers to the information contained in the document which indicated a future requirement for investments of approximately € 12.6 Million. That is € 7.9 Million for projects which would continue beyond 2009 and € 4.7 Million for projects which could not be included in the plan since financing could not be identified.
57. The Committee welcomed the fact that it was proposed to finance the investment programme for 2005 entirely from appropriations contained within the Ordinary Budget, and that there would be no recourse to loan.
58. The Committee noted that the initial estimates of costs for the two new buildings (NBGEN and EDQM) were made at May 2003 prices. The Committee noted that the evolution of the price index relating to construction works was currently higher than had been forecast initially. The Committee also took note that unforeseeable postponements in the construction programme would also engender additional price adjustments for the two building projects. The Committee was informed by the Secretariat that these issues were being followed closely by the Ad Hoc Committee of Experts on Buildings (CAHB), but wished to take this opportunity to inform the Committee of Ministers that preliminary calculations in respect of cost adjustments indicated that approximately € 7.0 Million of additional financing would need to be found for the two projects (€ 3.7 Million New General Building, € 3.3 Million EDQM Building). The Committee noted that detailed revised projections and financing proposals would be elaborated and presented for its examination in May 2005.
59. The Committee recommended that the future Budget Committee should follow the implementation of the construction budgets of the new buildings closely.
60. The Committee also noted that there were no appropriations as yet foreseen for the maintenance or running costs of the new buildings. Whilst the buildings would not be ready for occupation prior to the end of 2006/beginning of 2007, the Committee wished to draw the attention of the Committee of Ministers to the fact that provision would need to be made in future budgets to meet the necessary maintenance and running costs of the new buildings. The Committee noted that this subject was currently being examined by the Ad Hoc Committee of Experts on Buildings (CAHB) which had requested a comprehensive estimate of the relevant costs.
61. The Committee noted that the proposals of the CAHB to invest in an extension of the New General Building rather than the refurbishment and renovation of the B Building, which currently required major remedial work, are included within the Medium Term Investment Plan (€ 4.2M at May 2003 prices). The Committee noted that the costs included within the Investment Budget were on the assumption that the decision to construct the extension would be taken prior to commencing the construction work of the new building. The Committee wished to draw the attention of the Committee of Ministers to the fact that if the decision were delayed, then the costs involved in any subsequent extension to the Building would be significantly higher (€ 6.8 Million at May 2003 prices).
62. The Committee examined the draft service budgets for 2005. It had no particular comments on them.
Budget of the European Youth Centres
63. The Committee examined the draft budget for 2005 of the European Youth Centres and had no particular comments on it.
64. The Committee examined the draft extraordinary budget for 2005 and had no particular comments on it.
65. The Committee noted that member states' 2005 contributions to the Pension Reserve Fund were to be calculated on the basis of an actuarial study carried out in 2004. However, the results of the study would not be available until the updated staff contribution rates to the pension schemes were made available; the CCR's recommendation on these rates had not yet been finalised.
66. Pending receipt of this information, the Committee was able to approve the method proposed by the Secretariat to set the level of contributions for 2005.
67. It requested that in future the draft budget include a summary statement of the situation of the Pension Reserve Fund.
DRAFT BUDGET 2005 OF THE PARTIAL AGREEMENT SOCIAL AND PUBLIC HEALTH
68. The examination of the draft budget for 2005 of this Partial Agreement had been postponed from the September meeting of the Committee.
69. The Committee noted that there had been no decision by the Ministers Deputies regarding the incorporation of certain activities of the Partial Agreement into the Ordinary Budget.
70. The Committee examined two alternative draft budget scenarios for the Partial Agreement, one contained within CM(2004)155 Vol. II, which was prepared on the basis of the transfer taking place and a document prepared on the assumption that the transfer did not take place.
71. As the decision relating to the extension of activities was ultimately a political decision, the Committee could recommended the estimates of expenditure and receipts for 2005 as set out in both documents depending on the ultimate decision of the Committee of Ministers (CM(2004)155 Vol. IV).
72. The Committee examined the written explanations provided to it in document P-Bud (2004)9, concerning the request for additional temporary staff contained in the draft budget document (CM(2004)155, Vol. IV).
73. On the basis of the explanations provided the Committee was able to approve the proposals. The Committee stressed that the B grade post was to be created to assist the A grade post. As it was specifically stated that the latter would only be required for one to two years, the B grade post should similarly only be created for a period of one to two years.
IV. EXCHANGE OF VIEWS WITH THE GROUP OF RAPPORTEURS ON ADMINISTRATIVE AND BUDGETARY QUESTIONS
74. The Committee held an exchange of views with the Group of Rapporteurs on Administrative and Budgetary Questions.
V. EXCHANGE OF VIEWS WITH THE EXTERNAL AUDITORS (MR GRAHAM MILLER – DIRECTOR, UNITED KINGDOM NATIONAL AUDIT OFFICE)
75. The Committee held an exchange of views with Mr Graham Miller – Director of the United Kingdom National Audit Office, which had been appointed as the Organisation's external auditor for the financial years 2004-2008.
76. Mr Miller informed the Committee that a team of auditors from the National Audit Office had just spent two weeks in Strasbourg to familiarise itself with the Organisation and to prepare its audit programme.
77. The Committee was reassured in particular that the NAO was already following up the problems being experienced with the new payroll system of which it had been informed.
78. The Committee warmly welcomed Mr Miller's undertaking that the NAO intended to work closely with the Budget Committee during its mandate.
VI. EXTERNALLY FINANCED PROJECTS
79. The Committee examined and endorsed the proposals contained in document CM(2004)197, relating to the financing of the logistical support necessary for the implementation of Externally Financed Projects. The Committee suggested that the future Budget Committee might wish to review the operation in two to three years.
VII. ANY OTHER BUSINESS
80. Dates of 2005 meetings:
- 9-11 May 2005,
- 19-22 September 2005,
- 17-21 October 2005.
Winter session 2004
18 October at 9 a.m. – 22 October 2004
Room 13, Palais de l'Europe
DRAFT ANNOTATED AGENDA
1. Opening of the meeting
Report of the September 2004 meeting
CM(2004)172: Meeting report of the Budget Committee – September 2004 session
Minutes of the September 2004 meeting
P-Bud(2004)CR2: Budget Committee – Minutes of the Autumn meeting 2004 (27-30 September 2004)
2. Statement by the Director General of Administration and Logistics
3. Examination of the Draft Budgets 2005
CM(2004)155 Vol. I: Ordinary Budget Vote I to Vote IX
CM(2004)155 Vol. II: Draft Programme of Activities (Vote II)
CM(2004)155 Vol. III: Service Budgets, European Youth Centres, Publications, Extraordinary Budget, Pensions, European Youth Foundation
CM(2004)155 Vol. IV: Partial Agreements: Partial Agreement Social and Public Health and Subsidiary Budget of the Pharmacopoeia
P-Bud(2004)9: Additional information on the creations of posts required for PW Budget (Subsidiary budget of the European Pharmacopoeia)
P-Bud(2004)10: Analysis of Ordinary Budget variations 2004/2005
4. Exchange of Views with the Group of Rapporteurs on Administrative and Budgetary Questions
5. Exchange of Views with the External Auditors (Mr Graham Miller – Director, United Kingdom National Audit Office)
6. Medium-term Investment Plan 2005-2009
7. Externally Financed Projects
8. Any other business
Additional Information Documents:
Title of Document
Ordinary Budget 2005 – Analysis of Appropriation by Type 2005/2004
Communication by the Secretary General and the Deputy Secretary General to the 899th meeting of Ministers' Deputies – Extract
Meeting Report of the Ad hoc Committee of Experts on Buildings (CAHB) – 30 September – 1 October 2004
2004 Ordinary Budget as 30 September 2004
2004 Forecast – Summary table
Council of Europe – Voluntary Contribution by Donor
Meetings and documentation of the Committee of Ministers – Statistics
CoE Information Offices – Estimated Budgets 2005 – Average costs
GR-AB(2002)10 revised (restricted)
2003-2005 Programme for the enhancement of the resources of the European Court of Human Rights and other departments involved in the execution of judgments of the Court – Memorandum from the Secretary General
GR-AB(2002)10 revised Addendum (restricted)
Additional information supplied by the Secretariat at GR-AB's request
2003-2005 Programme for the enhancement of the resources of the European Court of Human Rights and other departments involved in the execution of judgments of the Court
Winter session 2004
(18-22 October 2004)
LIST OF PARTICIPANTS
Mr. Bruno WALDERT
Mrs. Marie-Chantal MUSSET
Absent – Sent apologies
Absent – Sent apologies
Mr. Claudio DE ROSE (18-20 October)
Mr. Arnoud CALS
Mrs. Beata NEHREBECKA
Mr. Andrey KOVALENKO (Substitute)
Absent – Sent apologies
Mr. Fikret DEMIR
Ms. Joycelyn BUCHAN