CHAPTER 11

AUDIT AND PRESENTATION OF ACCOUNTS

Regular reports to the Special Committee
Article 38
Every three months, the administrator shall present to the Special Committee a report on the implementation of revenue and expenditure since the beginning of the financial year. To this end, every operation commander shall provide the administrator with a report on expenditure relating to the operational common costs of the operation which he or she commands.

Conditions for the exercise of controls
Article 39
1
The persons responsible for auditing Athena's revenue and expenditure shall, before carrying out their task, have received clearance for access to classified information up to at least ‘SECRET UE/EU SECRET’ level held by the Council, or equivalent clearance from a Member State or NATO, as appropriate. Those persons shall ensure that they respect the confidentiality of the information and protect the data of which they acquire knowledge during their audit task, in accordance with the rules applicable to that information and those data.
2
The persons responsible for auditing Athena's revenue and expenditure shall have access without delay and without giving prior notice to the documents and to the contents of all data supports relating to that revenue and expenditure, and to the premises where those documents and supports are kept. They may make copies. The persons involved in implementing Athena's revenue and expenditure shall give the administrator and the persons responsible for the audit of that revenue and expenditure the necessary assistance in performing their task.

External auditing of the accounts
Article 40
1
When the implementation of Athena's expenditure has been entrusted to a Member State, a Union institution or an international organisation, that State, institution or organisation shall apply the rules which apply to the auditing of its own expenditure.
2
However, the administrator or persons appointed by him or her may at any time carry out an audit of the common costs of Athena incurred in preparation for, or further to, operations, or the operational common costs of an operation. Furthermore, the Special Committee, on the basis of a proposal by the administrator or a Member State, may at any time appoint external auditors, whose tasks and conditions of employment it shall determine.
3
With a view to external audits, a six-member College of Auditors shall be established. The Special Committee shall appoint members for a three-year period, renewable once, from candidates proposed by the Member States. The Special Committee may extend a member's mandate by up to six months.
The candidates must be members of the highest national audit body of a Member State, or recommended by that body, and offer adequate guarantees of security and independence. They must be available to carry out tasks on behalf of Athena as needed. In carrying out these tasks:
a
the members of the College of Auditors shall continue to be paid by their audit body of origin; Athena shall bear their mission expenses in accordance with the rules applicable to officials of the Union of an equivalent grade;
b
the members shall neither request nor receive instructions other than from the Special Committee; within its audit mandate the College of Auditors and its members shall be completely independent and solely responsible for the conduct of the external audit;
c
the members shall only report on their task to the Special Committee;
d
the members shall check during the financial year as well as ex post, through controls on the spot as well as on supporting documents, that expenditure financed or pre-financed through Athena is implemented in accordance with the legislation applicable and the principles of sound financial management, i.e. economy, effectiveness and efficiency, and that internal controls are adequate
Each year, the College of Auditors shall elect its chairman from amongst its members or extend his or her term of office. It shall adopt the rules applicable to audits carried out by its members in accordance with the highest international standards. The College of Auditors shall approve the audit reports drawn up by its members before their transmission to the administrator and to the Special Committee.
4
The Special Committee may decide on a case-by-case basis and upon specific motivations to use other external bodies.
5
The cost of the audits carried out by auditors acting on behalf of Athena shall be considered as a common cost to be borne by Athena.

Internal auditing of the accounts
Article 41
1
On the basis of a proposal by the administrator and after informing the Special Committee, the Secretary-General of the Council shall appoint an internal auditor of the Athena mechanism, and at least one deputy internal auditor, for a period of four years, renewable up to a total period not exceeding 8 years; internal auditors must have the necessary professional qualifications and offer sufficient guarantees of security and independence. The internal auditor may not be either an authorising officer or accounting officer; he or she may not take part in the preparation of financial statements.
2
The internal auditor shall report to the administrator on dealing with risks, by issuing independent opinions on the quality of management and control systems and by issuing recommendations for improving the internal audit in operations and promoting sound financial management. He or she shall be responsible in particular for assessing the suitability and effectiveness of internal management systems and the performance of departments in implementing policies and reaching objectives by reference to the risks associated with them.
3
The internal auditor shall perform his or her duties on all departments involved in the collection of Athena's revenue or the implementation of expenditure financed through Athena.
4
The internal auditor shall perform one or more audits during the financial year as appropriate. He or she shall report to the administrator and inform the operation commander of his or her findings and recommendations. The operation commander and the administrator shall ensure that action is taken on recommendations resulting from the audits.
5
The administrator shall submit a report each year to the Special Committee on the internal audit work done, indicating the number and type of internal audits carried out, observations made, recommendations put forward and how those recommendations were followed up.
6
Furthermore, each operation commander shall give the internal auditor full access to the operation which he or she commands. The internal auditor shall check that the financial and budgetary systems and procedures function correctly, and shall ensure that robust and effective internal audit systems are in operation.
7
The proceedings and reports of the internal auditor shall be made available to the College of Auditors along with all supporting documents relating thereto.

Annual presentation and closure of accounts
Article 42
1
Each operation commander shall provide Athena's accounting officer by 31 March following the end of the financial year, or within four months following the end of the operation which he or she commands, whichever is the earlier, with the necessary information to establish the annual accounts for common costs, the annual accounts for expenditure pursuant to Article 28 and the annual activity report.
2
The administrator, with the assistance of the accounting officer and each operation commander, shall establish and provide to the Special Committee and the College of Auditors, by 15 May following the end of the financial year, the financial statements and the annual activity report.
3
The Special Committee shall be provided, within eight weeks of the transmission of the financial statements, by the College of Auditors with an audit opinion and, by the administrator, assisted by the accounting officer and each operation commander, with Athena's audited financial statements
4
The Special Committee shall be provided, by 30 September following the end of the financial year, with the audit report by the College of Auditors, and shall examine the audit report, the audit opinion and the financial statements with a view to granting a discharge to the administrator, the accounting officer and each operation commander.
5
In a manner consistent with Regulation (EU, Euratom) No 966/2012 or any other Regulation which may replace it, all accounts, inventories and related documents shall be retained, each at its level, by the accounting officer, each operation commander and when applicable by the administrator for a period of five years from the date on which the corresponding discharge was granted. When an operation is terminated, the operation commander shall ensure transmission of all accounts and inventories to the accounting officer.
6
The Special Committee shall decide to enter the balance of the budget outturn for a financial year for which the accounts have been approved in the budget for the following financial year, as revenue or expenditure depending on the circumstances, by means of an amending budget. The Special Committee may, however, decide to enter the balance of the abovementioned budget outturn after having received the audit opinion from the College of Auditors.
7
The part of the balance of the budget outturn for a financial year which comes from the implementation of appropriations intended to cover common costs incurred in preparation for, or further to, operations, shall be entered against the next contributions from participating Member States.
8
The part of the balance of the budget outturn which comes from the implementation of appropriations intended to cover the operational common costs of a given operation shall be entered against the next contributions from the Member States which have contributed to that operation.
9
If reimbursement cannot be done by deduction from the contributions due to Athena, the balance of the budget outturn shall be repaid to the Member States concerned according to the GNI key of the year of reimbursement.
10
Each Member State participating in an operation may provide information by 31 March each year to the administrator, where appropriate through the operation commander, on the incremental costs it has incurred for the operation during the previous financial year. This information shall be broken down to show the main items of expenditure. The administrator shall compile this information in order to provide the Special Committee with an overview of the incremental costs of the operation.

Closure of the accounts of an operation
Article 43
1
When an operation is complete, the Special Committee may decide, on the basis of a proposal by the administrator or by a Member State, that the administrator, with the assistance of the accounting officer and of the operation commander, shall submit to the Special Committee the financial statements for that operation, at least up to the date on which it was completed, and, if possible, up to the date on which it was wound up. The deadline imposed on the administrator may not be less than four months from the date on which the operation was completed.
2
If the financial statements cannot, within the given deadline, include the revenue and expenditure connected with the winding up of that operation, that revenue and expenditure shall appear in the financial statements for Athena and shall be examined by the Special Committee in the context of the procedure foreseen in Article 42.
3
The Special Committee shall, based on an opinion of the College of Auditors, approve the financial statements for the operation which have been submitted to it. It shall grant a discharge to the administrator, the accounting officer and each operation commander for the operation in question.
4
If reimbursement cannot be done by deduction from the contributions due to Athena, the balance of the budget outturn shall be repaid to the Member States concerned according to the GNI key of the year of reimbursement.