Management’s preliminary comments to the ERC Report COMMITTEE OF COUNCIL June 20, 2002

1. General view We thank the ERC for the great service done to CERN. The work of the Internal Audit and Task forces is integrated in a clear picture… …and a fresh scrutiny of CERN has produced a very useful set of recommendations. The interaction of CERN Management with the ERC has been open and fruitful; As a consequence, the Medium Term Plan now presented embodies most of the ERC short and medium term recommendations on non-LHC activities, savings, and on LHC management structure and reporting; Some structural recommendations need to be examined with Council before implementation, in particular the proposal of a new Audit Committee; Longer term aspect, such as CERN top management structure, are for the next Management to consider.

Overview We recognize significant lack of transparency in the managing and reporting of the LHC; This has caused severe embarrassment to Council, Management and CERN; We are determined to change structure and organisation, so that never again shall Council be caught off guard, And to restore excellence in managing CERN The ERC recommendations provide a good basis and we are going to act in consequence.

CONCLUSIONS The short and medium term recommendations of the ERC concerning: –non-LHC activities, –savings, –LHC management and reporting tools are either in place or being implemented; The Programme Controller is established; the proposal to appoint a Finance Director/Controller is submitted to Council The savings programme is put on firm ground; Audit structure: we propose CC to establish a Working Group to assess the overall situation, aiming at an intermediate proposal for November and full implementation by the December Council. Management shall provide in September an Action List and Time- Table for implementation of the ERC recommendations.