report on budgetary and financial management report on...specification, sound financial management...
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ESMA02-91-2577
Report on Budgetary and Financial Management Financial Year 2018
1
Table of Contents
Introduction .................................................................................................................... 2
Legal framework – Financial Regulation .................................................................... 2
Budgetary principles (summary) ................................................................................ 2
1.2.1 Principle of unity and budget accuracy ............................................................... 2
1.2.2 Principle of annuality .......................................................................................... 2
1.2.3 Principle of equilibrium ....................................................................................... 2
1.2.4 Principle of unit of account ................................................................................. 2
1.2.5 Principle of universality ...................................................................................... 3
1.2.6 Principle of specification ..................................................................................... 3
1.2.7 Principle of sound financial management ........................................................... 3
1.2.8 Principle of transparency .................................................................................... 3
Types of appropriations ............................................................................................. 3
Description of the budget accounts ............................................................................ 3
Financial Systems and Management ......................................................................... 4
Revenue ......................................................................................................................... 4
Budgetary tables ............................................................................................................ 6
Budgetary transfers – C1 ........................................................................................... 6
Budgetary transfers – R0 ........................................................................................... 9
Budgetary execution 2018-C1 and 2018-C8 .............................................................10
Carry-forward 2018-2019 – C1 to C8 and R0 ............................................................11
ANNEX I: Budget Execution 2018 (C1-credits) ..............................................................12
ANNEX II: Budget Execution 2018 (C4-credits) .............................................................15
ANNEX III: Budget Execution 2018 (C5-credits) ............................................................16
ANNEX IV: Budget Execution 2018 (R0-credits) ...........................................................16
ANNEX V: Automatic Carry Forward 2018-2019 (C8 credits) ........................................17
2
Introduction
Legal framework – Financial Regulation
This report on budgetary and financial management has been prepared in accordance with
Articles 93 of the Financial Regulation applicable to ESMA.
Budgetary principles (summary)
The establishment and implementation of the Authority’s budget shall comply with the
principles of unity and budget accuracy, annuality, equilibrium, unit of account, universality,
specification, sound financial management and transparency as provided for in the Authority
Financial Regulation.
1.2.1 Principle of unity and budget accuracy
The budget is the instrument which, for each financial year, forecasts and authorises the
revenue and expenditure considered necessary for the Authority’s activities. No revenue shall
be collected and no expenditure effected unless booked to a line in the budget. An
appropriation must not be entered in the budget if it is not for an item of expenditure considered
necessary. No expenditure may be committed or authorised in excess of the appropriations
authorised by the budget.
1.2.2 Principle of annuality
The appropriations entered in the budget shall be authorised for one financial year which shall
run from 1 January to 31 December, inclusive. Commitments shall be entered in the accounts
on the basis of the legal commitments entered into up to 31 December. Payments shall be
entered in the accounts for a financial year on the basis of the payments effected by the
accounting officer by 31 December of that year at the latest.
1.2.3 Principle of equilibrium
The Authority’s budget revenue and payment appropriations must be in balance. Commitment
appropriations may not exceed the amount of the voted budget, plus own revenue and any
other revenue. The Authority may not raise loans.
1.2.4 Principle of unit of account
The budget shall be drawn up and implemented in Euro and the accounts shall be presented
in Euro.
3
1.2.5 Principle of universality
Total revenue shall cover all expenditure. All revenue and expenditure shall be entered in full
without any adjustment against each other.
1.2.6 Principle of specification
The appropriations in their entirety shall be earmarked for specific purposes by title and
chapter; the chapters shall be further subdivided into articles and items. The Executive Director
may authorise transfers from one article to another within each chapter.
1.2.7 Principle of sound financial management
Budget appropriations shall be used in accordance with the principle of sound financial
management, that is to say, in accordance with the principles of economy, efficiency and
effectiveness.
The principle of economy requires that the resources used by the Authority for the pursuit of
its activities shall be made available in due time, in appropriate quantity and quality and at the
best price. The principle of efficiency is concerned with the best relationship between
resources employed and results achieved. The principle of effectiveness is concerned with
attaining the specific objectives set and achieving the intended results.
1.2.8 Principle of transparency
The budget shall be drawn up and implemented and the accounts presented in compliance
with the principle of transparency. The budget, as finally adopted, shall be published in the
Official Journal of the European Communities and amending budgets shall be published in an
appropriate way within two months of their adoption.
Types of appropriations
The Authority makes use of non-differentiated appropriations for both its administrative (title I
& II) and operational expenditure (title III). As from 2015 differentiated appropriations are used
for Title IV.
Description of the budget accounts
Following the provisions of the Financial Rules and Implementing Rules of the Authority,
budget accounts shall provide a detailed record of budget implementation and shall record all
budget revenue and expenditure operations (voted appropriations, commitments and
payments of the financial year, entitlements established, etc.).
The content of the budget accounts – also called budget lines - is adopted annually by the
Board of Supervisors, taking into account the general budgetary nomenclature and the
4
Authority Implementing Rules on the structure and presentation of the statement of
expenditure.
Title I budget lines are related to staff expenditure: salaries and allowances of the staff
members working for the Authority and all other entitlements such as removal expenditures,
installation costs. Title I also includes recruitment costs incurred by the Authority. Interim,
training, staff perquisites and administrative mission costs are incorporated also under Title I.
Title II budget lines relate to all buildings, equipment and miscellaneous operating
administrative expenditure.
Title III budget lines provide for the implementation of all the activities carried out in the frame
of the missions and tasks assigned to the Authority by its establishing Regulation. The
accounts under this title are grouped per operational activity group and sub-divided into the
main activities performed in each area such as organisation of meetings, trainings,
coordination missions, supervisory activities etc.
Title IV budget lines provide for the implementation of tasks entrusted to the Authority by the
National Competent Authorities. As compared to the other three titles differentiated
appropriations are used within this title.
Financial Systems and Management
The budget accounts are managed by the ABAC system and the general accounts are
maintained by the SAP system, which has a direct interface with the General Accounting
System of the European Commission. The various budgetary and financial reports are
produced using the Business Objects reporting tool.
Revenue
The ESMA 2018 budget with a total amount of € 44 481 189 was adopted by ESMA’s
Management Board in the meeting on 13th December 2017. € 11 768 296 was set as
contribution to ESMA from the total subsidy of the European Union and € 18 948 632 was set
as contributions from the National Competent Authorities that are members (€ 18 425 189)
and non-voting members (€ 523 443) of ESMA’s Board of Supervisors. In addition € 11 634
458 was included in the budget for fees from Credit Rating Agencies and Trade Repositories.
Finally € 2 129 803 was forecasted for the National Competent Authorities contribution for the
delegated tasks.
One budget amendment was approved for ESMA’s 2018 budget hereby reducing the budget
from € 44 481 189 to € 44 258 689. The decrease of € 222 500 was a combination of an
increase of € 77 500 for additional CRA fees and a decrease of € 300 000 of SFTR fees, which
as a result of a delay in the approval process of the legislation related to SFTR, are budgeted
in 2019.
5
In the course of 2018 some miscellaneous revenue (inscribed as C4-credits in 2018) was
collected for a total of € 5 476 relating to:
€ 1 002 received from insurance company for loss of laptop computer
€ 3 121 reimbursements of overpaid amounts to staff
€ 1 353 of other miscellaneous reimbursements
Moreover, in 2017 an amount equal to €660 revenue was collected and in 2018 it was carried
forward and consumed as C5-credits.
In addition, an amount of € 35 000 of revenue established at the end of 2017 was carried
forward and cashed in 2018.
6
Budgetary tables
Budgetary transfers – C1
BUDGET TRANSFERS AND AMENDMENTS IN 2018 (BALANCE PER BUDGET LINE)
BL BUDGET CHAPTER / LINE Initial budget
adopted
Amending
budgets Transfers Final adopted
budget
TITLE I - STAFF EXPENDITURE
11. Staff in active
employment 24 920 189 0 -679 805 24 240 384
1100 Staff salaries, allowances,
insurance and grants
22 625 189 0 -407 504 22 217 685
1120 Local salaries 150 000 0 -114 000 36 000
1133 Contribution to the
Community pension scheme
2 145 000 0 -158 301 1 986 699
12. Expenditure relating to
staff management and
recruitment 300 000 0 80 200 380 200
1200
Expenditure relating to staff
management and recruitment 300 000 0 80 200 380 200
14. Socio-medical
infrastructure 530 000 0 16 662 546 662
1400 Medical service 30 000 0 9 249 39 249
1410 Schools and Kindergartens 100 000 0 -44 088 55 912
1420 Canteen 400 000 0 51 500 451 500
16. Training 300 000 0 57 200 357 200
1600 Training 300 000 0 57 200 357 200
TOTAL TITLE I 26 050 189 0 -525 743 25 524 446
7
BL BUDGET CHAPTER / LINE Initial budget
adopted
Amending
budgets Transfers Final adopted
budget
TITLE II - INFRASTRUCTURE AND ADMIN. EXPENDITURE
20. Rental of building and
associated costs 5 375 000 0 634 217 6 009 217
2000 Rental of building 5 005 000 0 398 600 5 403 600
2020 Maintenance, works -
refurbishment
50 000 0 -6 459 43 541
2090
Other expenditure on
buildings, security and
moving services
320 000
0
242 076 562 076
21. Information and
communication technology 300 000 0 -9 042 290 958
2100 Internal IT and
telecommunications 300 000 0 -9 042 290 958
23. Current administrative
expenditure 850 000 0 8 567 858 567
2300 Facility management
services
335 000 0 46 400 381 400
2304 Services on administrative
matters
450 000 0 -36 968 413 032
2305 Subscriptions 60 000 0 2 853 62 853
2308 Library Expenditure 5 000 0 -3 717 1 283
27. Representation
expenses, receptions and
events
5 000 0 1 507 6 507
2700 Representation expenses,
receptions and events
5 000 0 1 507 6 507
TOTAL TITLE II 6 530 000 0 635 249 7 165 249
8
BL BUDGET CHAPTER / LINE Initial budget
adopted
Amending
budgets Transfers Final
adopted
budget
TITLE III - OPERATING EXPENDITURE
31. Training costs 50 000 0 -14 635 35 365
3100 Training costs 50 000 0 -14 635 35 365
32. IT project costs 7 525 000 - 222 500 -403 911 6 898 589
3200 IT project costs 7 525 000 -222 500 -403 911 6 898 589
34. Studies and legal advice 100 000 0 183 521 283 521
3400 Legal advice 100 000 0 183 521 283 521
35. Access to data for
Economic Research
350 000 0 -3 883 346 117
3500 Access to data for Economic
Research
350 000 0 -3 883 346 117
36. Mission expenses 600 000 0 -73 245 526 755
3600 Mission expenses 600 000 0 -73 245 526 755
37. Information and publishing 346 000 0 301 518 647 518
3700 Translation and interpretation 296 000 0 307 752 603 752
3701 Communication services 50 000 0 -6 234 43 766
38. Meeting expenses 315 000 0 54 509 369 509
3800 General meeting expenses 200 000 0 28 250 228 250
3810 Stakeholder groups consultations 65 000 0 6 010 71 010
3820 Governance 40 000 0 -7 751 32 249
3830 Board of Appeal costs 10 000 0 28 000 38 000
39. Services on operational
matters
200 000 0 -86 120 113 880
3900 Services on operational matters 200 000 0 -86 120 113 880
TOTAL TITLE III 9 486 000 -222 500 -42 247 9 221 253
BL BUDGET CHAPTER / LINE Initial budget
adopted
Amending
budgets Transfers Final adopted
budget
TITLE IV – DELEGATED TASKS
40. Single Interface to Trade
Repositories
122 061 0 -50 379 71 682
4000 Single Interface to Trade
Repositories
122 061 0 -50 379 71 862
41. Instruments Reference
Data
163 136 0 -16 880 146 256
4100 Instruments Reference Data 163 136 0 -16 880 146 256
TOTAL TITLE IV 285 197 0 -67 259 217 938
TOTAL BUDGET 2018 42 351 386 -222 500 0 42 128 886
9
Following the budget amendment n. 1 in 2018 ESMA’s budget decreased by € 222 500.
Moreover in the course of the year € 635 249 was transferred from title II to cover budgetary
needs on titles I, III and IV.
Budgetary transfers – R0
BL BUDGET CHAPTER /
LINE
Initial
budget
adopted
Amending
budgets
Not
established
Transfer
s
Final
budget
available
TITLE IV – DELEGATED TASKS
40. Single Interface to
Trade Repositories
485 006 485 000
4000 Single Interface to Trade
Repositories
485 006 485 000
41. Instruments
Reference Data
1 644 797 - 1 053 1 643 744
4100 Instruments Reference
Data
1 644 797 - 1 053 1 643 744
TOTAL TITLE IV 2 129 803 0 - 1 053
2 128 750
TOTAL BUDGET 2018
C1 + R0
44 481 189 - 222 500 - 1 053 0 44 257 636
10
Budgetary execution 2018-C1 and 2018-C8
2018-C1
Voted Budget
2018
(after transfers)
(1)
Commitments (2) Payments (3) To be carried
forward (4)
TITLE BUDGET 2018 Committed % (2)/(1) Paid % (3)/(1) (2) – (3) % (4)/(1)
TITLE I 25 524 446 25 524 092 100.00% 25 229 966 98.85% 294 125 1.15%
TITLE II 7 165 249 7 165 194 100.00% 6 197 734 86.50% 967 460 13.50%
TITLE III 9 221 253 9 216 069 99.94% 5 821 292 63.13% 3 394 778 36.81%
TITLE IV 217 938 217 938 100.00% 192 311 88.24% 25 627 11.76%
TOTAL C1 42 128 886 42 123 294 99.99% 37 441 303 88.87% 4 681 991 11.11%
By the end of the year ESMA had committed 100.00% of the total C1-budget and had paid out
88.87% of the total available payment appropriations which is comparable to last year
(100.00% committed and 89,76% paid). Overall, the payment execution rate was relatively
high with the exception of title III.
In annex I a more detailed overview of the budgetary execution of C1-credits can be found.
2018-C8 Carry-forward
(1) Paid (2)
To be cancelled
(3)
TITLE Committed Paid %
(2)/(1) (1) – (2) % (3)/(1)
TITLE I 219 579 199 433 90.83% 20 146 9.17%
TITLE II 618 354 588 963 95.25% 29 391 4.75%
TITLE III 3 291 804 3 061 054 92.99% 230 750 7.01%
TITLE IV 8 739 6 071 69.47% 2 668 30.53%
TOTAL 4 138 476 3 855 521 93.16% 282 955 6.84%
11
Out of a total of € 4 138 476 C8 payment appropriations 93% has been consumed in 2018.
From the total C8 commitments available 93,2% was committed (€ 3 855 521 out of € 4 138
476 of C8 budget) as compared to 96,5% in 2017.
Carry-forward 2018-2019 – C1 to C8 and R0
Automatic Carry Forward 2018-2019 C1 &
C4 to C8
Commitments RAL Payment Credit
TITLE I - Staff Expenditure 290 773 290 773
TITLE II - Administrative Expenditure 967 460 967 460
TITLE III - Operational Expenditure 3 394 778 3 394 778
TITLE IV – Delegated Tasks Expenditure 25 627 25 627
TOTAL C1 to C8 4 678 639 4 678 639
TOTAL R0 1 160 935 1 160 935
GRANDTOTAL 5 839 574 5 839 574
The total amount of commitment and corresponding payment appropriations to be carried-
forward to 2019 is € 5 839 574. Out of this amount € 2 638 598 should cover payments for
goods and services that were delivered in 2018 but for which no invoice had been received
yet. The remaining amount (€ 3 200 976) will be used in the course of 2019 and beyond (for
R0-credits) to pay for services and goods still to be delivered. A more detailed overview of the
amounts to be carried-forward per budgetary chapter can be found in annex IV.
12
ANNEX I: Budget Execution 2018 (C1-credits)
Title I: Staff Expenditure
Budget
line Description
Commitment &
Payment
Appropriations (1)
Commitment
(2)
%
Committed
(2/1)
Paid (3) % Paid
(3/1)
R A L
(2-3)
A-1100 Basic salaries 22 217 685 22 217 685 100.00% 22 214 333 99.98% 3 352
A-1120 Local salaries 36 000 36 000 100.00% 31 124 86.46% 4 876
A-1133 Contribution to the Community pension
scheme
1 986 699 1 986 699 100.00% 1 986 699 100.00% 0
A-1200 Expenditure relating to staff management
and recruitment
380 200 380 200 100.00% 291 524 76.68% 88 676
A-1400 Medical service 39 249 39 249 100.00% 29 737 75.76% 9 513
A-1410 Schools and kindergartens 55 912 55 912 100.00% 55 912 100.00% 0
A-1420 Canteen 451 500 451 500 100.00% 379 946 84.15% 71 554
A-1600 Training 357 200 356 846 99.90% 240 692 67.38% 116 154
Title I: Staff Expenditure 25 524 446 25 524 092 100.00 % 25 229 966 98.85% 294 125
13
Title II: Infrastructure and Administrative Expenditure
Budget
line Description
Commitment &
Payment
Appropriations
(1)
Commitment
(2)
%
Committed
(2/1)
Paid (3) % Paid
(3/1)
R A L
(2-3)
A-2000 Building rental, charges and taxes 5 403 600 5 403 600 100.00% 5 303 617 98.15% 99 983
A-2020 Maintenance, works and refurbishment 43 541 43 541 100.00% 34 244 78.65% 9 297
A-2090 Other expenditure on buildings, security
and moving services
562 076 562 022 99.99% 281 000 49.99% 281 022
A-2100 Internal ICT and telecommunications 290 958 290 957 100.00% 167 819 57.68% 123 139
A-2300 Facility management services 381 400 381 400 100.00% 252 030 66.08% 129 369
A-2304 Services on administrative matters 413 032 413 032 100.00% 92 098 22.30% 320 934
A-2305 Subscriptions 62 853 62 853 100.00% 59 636 94.88% 3 217
A-2308 Library expenditure 1 283 1 283 100.00% 1 283 100.00% 0
A-2700 Representation expenses, receptions
and events 6 507 6 507 100.00% 6 007 92.31% 500
Title II: Infrastructure and Administrative
Expenditure 7 165 249 7 165 194 100.00% 6 197 734 86.50% 967 460
14
Title III: Operating Expenditure
Budget
line Description
Commitment &
Payment
Appropriations (1)
Commitment
(2)
%
Committed
(2/1)
Paid (3) % Paid
(3/1)
R A L
(2-3)
B3-100 Training costs 35 365 35 365 100.00% 35 365 100.00% 0
B3-200 IT project costs 6 898 589 6 893 406 99.92% 4 091 753 59.31% 2 801 652
B3-400 Legal advice 283 521 283 521 100.00% 70 421 24.84% 213 100
B3-500 Access to data for Economic
Research
346 117 346 117 100.00% 246 169 71.12% 99 948
B3-600 Mission expenses 526 755 526 755 100.00% 473 727 89.93% 53 028
B3-700 Translation and interpretation 603 752 603 752 100.00% 464 873 77.00% 138 879
B3-701 Communication services 43 766 43 766 100.00% 43 766 100.00% 0
B3-800 General meeting expenses 228 250 228 250 100.00% 175 973 77.10% 52 277
B3-810 Stakeholder group - Consultations 71 010 71 010 100.00% 71 010 100.00% 0
B3-820 Governance 32 249 32 249 100.00% 25 608 79.41% 6 641
B3-830 Board of Appeal costs 38 000 38 000 100.00% 8 748 23.02% 29 252
B3-900 Services on operational matters 113 880 113 880 100.00% 113 880 100.00% 0
Title III: Operating Expenditure 9 221 253 9 216 069 99.94% 5 821 292 63.13% 3 394 778
15
Title IV: Delegated Tasks Expenditure
Budget
line Description
Commitment &
Payment
Appropriations
(1)
Commitment
(2)
%
Committed
(2/1)
Paid (3) % Paid
(3/1)
R A L
(2-3)
B4-000 Single Interface to Trade Repositories 71 682 71 682 100.00% 58 697 81.88% 12 985
B4-100 Instruments Reference Data 146 256 146 256 100.00% 133 614 91.36% 12 642
Title IV: Delegated Tasks Expenditure 217 938 217 938 100.00% 192 311 88.24% 25 627
TOTAL FUND SOURCE C1 42 128 886 42 123 294 99.99% 37 441 303 88.87% 4 681 991
ANNEX II: Budget Execution 2018 (C4-credits)
Budget
line Description
Commitment &
Payment
Appropriations (1)
Commitment
(2)
%
Committe
d
(2/1)
Paid (3) % Paid
(3/1)
R A L
(2-3)
A-1100 Basic salaries 1 621 1 621 100.00% 1 621 100.00% 0
A-1600 Training 1 500 1 500 100.00% 1 500 100.00% 0
Title I: Staff Expenditure 3.121 3 121 100.00% 3 121 100.00% 0
A-2100 Internal ICT and telecommunications 1 002 1 002 100.00% 1 002 100.00% 0
A-2304 Services on administrative matters 907 907 100.00% 907 100.00% 0
Title II: Infrastructure and Administrative
Expenditure
1.909 1 909 100.00% 1 909 100.00% 0
B3-600 Mission expenses 446 0 0.00% 0 0.00% 0
Title III: Operating Expenditure 446 0 0.00% 0 0.00% 0
TOTAL FUND SOURCE C4 5 476 5 030 91.86% 5 030 91.86% 0
16
ANNEX III: Budget Execution 2018 (C5-credits)
Budget
line Description
Commitment &
Payment
Appropriations (1)
Commitment
(2)
%
Committe
d
(2/1)
Paid (3) % Paid
(3/1)
R A L
(2-3)
B3-600 Mission expenses 660 660 100.00% 660 100.00% 0
Title III: Operating Expenditure 660 660 100.00% 660 100.00% 0
TOTAL FUND SOURCE C5 660 660 100.00% 660 100.00% 0
ANNEX IV: Budget Execution 2018 (R0-credits)
Budget
line Description
Commitment &
Payment
Appropriations
(1)
Commitment
(2)
% Committed
(2/1) Paid (3)
% Paid
(3/1)
R A L
(1-3)
B4-000 Single Interface to Trade Repositories 852 038 835 800 100.00% 415 952 49.77% 436 085
B4-100 Instruments Reference Data 3 410 253 3 410 253 100.00% 2 685 403 78.74% 724.850
Title IV: Delegated Tasks Expenditure 4 262 291 4 246 053 100.00 % 3 101 356 73.04% 1 160 935
TOTAL FUND SOURCE R0 4 262 291 4 246 053 100.00 % 3 101 356 73.04% 1 160 935
17
ANNEX V: Automatic Carry Forward 2018-2019 (C8
credits)
The commitment and payment credits carried forward in the change of the year 2018-2019 are
detailed in the following table:
Budget
line Description
Automatic
Carry
Forward
2017-2018 A-1120 Temporary workers 4 876
A-1200 Expenditure relating to staff management and recruitment 88 676
A-1400 Medical service 9 513
A-1420 Canteen 71 554
A-1600 Training 116 154
Title I: Staff Expenditure 290 773
A-2000 Building rental, charges and taxes 99 983
A-2020 Maintenance, works and refurbishment 9 297
A-2090 Other expenditure on buildings, security and moving services 281 022
A-2100 Internal ICT and telecommunications 123 139
A-2300 Facility management services 129 369
A-2304 Services on administrative matters 320 934
A-2305 Subscriptions 3 217
A-2700 Representation expenses, receptions and events 500
Title II: Infrastructure and Administrative Expenditure 967 460
B-3200 IT project costs 2 801 652
B-3400 Legal advice 213 100
B-3500 Access to data for Economic Research 99 948
B-3600 Mission expenses 53 028
B-3700 Translation and interpretation 138 879
B-3800 General meeting expenses 52 277
B-3820 Governance 6 641
B3-830 Board of Appeal costs 29 252
Title III: Operating Expenditure 3 394 778
B4-000 Single Interface to Trade Repositories 12 985
B4-100 Instruments Reference Data 12 642
Title IV: Delegated Tasks Expenditure 25 627
TOTAL FUND SOURCE C1 4 678 6391
1 The difference with the total amount of 4.681.991 in table under section 3.3 relate to remaining C1-credits on the salary budget line that cannot be carried forward following the financial rules.