2010/2142(DEC)

2009 discharge: EU general budget, Section III, Commission

Procedure completed

2010/2142(DEC) 2009 discharge: EU general budget, Section III, Commission
RoleCommitteeRapporteurShadows
Opinion AFCO
Opinion AFET DE KEYSER Véronique (PSE)
Opinion AGRI
Opinion BUDG
Lead CONT CHATZIMARKAKIS Jorgo (ALDE) FJELLNER Christofer (EPP), IVANOVA Iliana (EPP), IVAN Cătălin Sorin (S&D), STAES Bart (Verts/ALE), SØNDERGAARD Søren Bo (GUE/NGL)
Opinion CULT LØKKEGAARD Morten (ALDE)
Opinion DEVE BERMAN Thijs (S&D)
Opinion ECON
Opinion EMPL ŐRY Csaba (EPP)
Opinion ENVI HAUG Jutta (S&D)
Opinion FEMM GARCÍA PÉREZ Iratxe (S&D)
Opinion IMCO SCHALDEMOSE Christel (S&D)
Opinion INTA
Opinion ITRE
Opinion JURI
Opinion LIBE BUSUTTIL Simon (EPP)
Opinion PECH
Opinion REGI GEIER Jens (S&D)
Opinion TRAN GROSCH Mathieu (EPP)
Lead committee dossier: CONT/7/03660
Subjects
Links

Activites

  • 2011/09/27 Final act published in Official Journal
  • 2011/05/10 Text adopted by Parliament, single reading
    • T7-0194/2011 summary
    • Results of vote in Parliament
  • 2011/04/14 Committee report tabled for plenary, single reading
  • 2011/04/14 Committee report tabled for plenary, single reading
  • 2011/03/28 Vote in committee, 1st reading/single reading
  • 2011/03/08 Deadline Amendments
  • 2011/02/28 Document attached to the procedure
    • COM(2011)0104 summary
    • SEC(2011)0262 summary
    • DG Budget, ŠEMETA Algirdas
  • #3067
  • 2011/02/14 Council Meeting
  • 2011/02/07 Committee draft report
  • 2011/02/03 Supplementary non-legislative basic document
    • 05893/2011 summary
  • 2010/11/18 Document attached to the procedure
    • COM(2010)0650 summary
    • SEC(2010)1438 summary
    • DG Budget, ŠEMETA Algirdas
  • #3045
  • 2010/11/17 Council Meeting
  • 2010/10/07 Committee referral announced in Parliament, 1st reading/single reading
  • 2010/09/09 Court of Auditors: opinion, report
  • 2010/08/31 Document attached to the procedure
    • COM(2010)0447 summary
    • SEC(2010)0994 summary
    • DG Budget, ŠEMETA Algirdas
  • 2010/07/20 Non-legislative basic document published
    • SEC(2010)0963 summary
  • 2010/07/20 Date
  • 2010/07/20 Non-legislative basic document
    • SEC(2010)0963 summary
    • DG Budget, ŠEMETA Algirdas

Documents

AmendmentsDossier
341 2010/2142(DEC) 2009 discharge: EU general budget, Section III, Commission
2011/01/02 CULT 4 amendments...
source: PE-456.664
2011/01/27 DEVE 5 amendments...
source: PE-456.929
2011/02/02 TRAN 7 amendments...
source: PE-456.904
2011/02/14 IMCO 2 amendments...
source: PE-458.749
2011/02/16 ENVI 3 amendments...
source: PE-458.664
2011/02/21 REGI 10 amendments...
source: PE-458.855
2011/03/02 LIBE 1 amendments...
source: PE-458.523
2011/09/03 AFET 5 amendments...
source: PE-460.796
2011/10/03 CONT 304 amendments...
source: PE-460.797

History

(these mark the time of scraping, not the official date of the change)

2012-02-09
activities added
  • date
    2010-07-20
    docs
    • url
      http://www.europarl.europa.eu/registre/docs_autres_institutions/commission_europeenne/sec/2010/0963/COM_SEC(2010)0963_EN.pdf
      text
      • PURPOSE: presentation by the Commission of the consolidated annual accounts of the European Union for the financial year 2009, as part of the 2009 discharge procedure.

        Analysis of the accounts of the EU Institutions: Section III - European Commission.

        CONTENT: this Commission document sets out the consolidated annual accounts of the European Union for the financial year 2009 as prepared on the basis of the information presented by the institutions, organisations and bodies of the EU, in accordance with Article 129 (2) of the Financial Regulation applicable to the EU's General Budget, including the European Commission.

        The document helps to bring insight into the EU budget mechanism and the way in which the budget has been managed and spent in 2009. It recalls that European Union's operational expenditure covers the various headings of the financial framework and takes different forms, depending on how the money is paid out and managed.

        In accordance with the Financial Regulation, the Commission implements the general budget using the following methods:

        • direct centralised management: direct implementation of the budget by the Commission services;
        • indirect centralised management: the Commission confers tasks of implementation of the budget to bodies of EU law or national law, such as the EU agencies of public law or with public service missions;
        • decentralised management: the Commission delegates certain tasks for implementation of the budget to third countries;
        • shared management: under this method of management budget implementation tasks are delegated to Member States. The majority of the expenditure falls under this mode "Shared Management" involving the delegation of tasks to Member States, covering such areas as agricultural spending and Structural Actions;
        • joint management: under this method, the Commission entrusts certain implementation tasks to an international organisation.

        The document also presents the different financial actors involved in the budget process (accounting officers, internal officers and authorising officers) and recalls their respective roles in the context of the tasks of sound financial management.

        Amongst the other legal elements relating to the implementation of the EU budget presented in this document, the paper focuses on the following issues:

        ·         the way in which EU public expenditure is committed and spent;

        ·         the means of recovery following irregularities detected;

        ·         the modus operandi of the accounting system:

        ·         the audit process followed by the European Parliament's granting of the discharge.

        To recall, the final control is the discharge of the budget for a given financial year. The discharge represents the political aspect of the external control of budget implementation and is the decision by which the European Parliament, acting on a Council recommendation, "releases" the Commission from its responsibility for management of a given budget by marking the end of that budget's existence (please refer to the follow-up reports presented in this procedure file).

        Lastly, the document presents a series of tables and detailed technical indicators on (i) the balance sheet; (ii) the economic outturn account; (iii) cashflow tables; (iv) technical annexes concerning the financial statements.

        EU expenditure and recoveries of wrongly made payments: in addition to the legal elements on how EU expenses are implemented, the document highlights the basic accounting principles that govern the management and implementation of EU expenditure. Among the figures provided, the main issues concern the recovery of wrongly made payments (mainly in the agriculture or cohesion sectors).

        At 31 December 2009, the amount of EAGF expenditure subject to future corrections following audits which were not yet finalised totalled EUR 2.8 billion. At 31 December 2009, EUR 1.1 billion is estimated as the amount of potential financial corrections in the process of being decided.

        The document also clarifies the following:

        ·         undrawn commitments financial activities:undrawn commitments financial activities amounted to EUR 5 733 at 31 December 2009 (against EUR 4 885 million the previous year): the main amounts relate to Balance of Payments loan agreements signed in 2008 and 2009 but not yet disbursed before year-end;

        ·         budgetary commitments made, payments still pending: the budgetary RAL ("Reste à Liquider") is an amount representing the open commitments for which payments and/or de-commitments have not yet been made. At 31 December 2009 the budgetary RAL totalled EUR 177 272 million;

        ·         the amount of financial corrections: for 2009, the Commission was able to recover EUR 2 873 million in financial corrections and EUR 446 million in recoveries, totalling an amount of EUR 3 319 million (compared with EUR 2 873 million in 2008).

        Implementation of appropriations under Section III of the budget for the financial year 2009 : the annexes include the following tables:                       

        A) Table showing the commitment appropriations by heading (including the % of implementation):

        1. Sustainable growth: EUR 62 444 million (97.69%)
        2. Preservation & management of natural resources: EUR 61 484 million (98.03%)
        3. Citizenship, freedom, security and justice: EUR 2 264 million (97.27%)
        4. The EU as a global partner: EUR 8 481 million (97.34%)
        5. Administration: EUR 7 662 million (95.48%)
        6. Compensations: EUR 209 million (100%)

        Total commitments: EUR 142 545 million (97.69%).

        B) Table showing the implementation of payments by heading:

        1. Sustainable growth: EUR      44 684 million (94.03%)
        2. Preservation & management of natural resources: EUR 55 877 million (97.85%)
        3. Citizenship, freedom, security and justice: EUR 1 993 million (91.66%)
        4. The EU as a global partner: EUR 7 983 million (90.67%)
        5. Administration: EUR 7 615 million (86.99%)
        6. Compensations: EUR 209 million (100%)

        Total payments: EUR 118 361 million (95.03%).

        Lastly, the document states that the year 2009 saw the EU Budget still in transition, from one multi-annual Financial Framework to the next. Commitment appropriations reflected the spending orientations agreed for the new programming period 2007 - 2013, whereas the part of the payment claims still related to the previous 2000 - 2006 Financial Framework was close to 12%. For commitments, the initial budget and hence the political targets set were carried out virtually as planned. The implementation rate for payments, excluding unused Emergency Aid reserve, was 95% of the initial budget.

        For further details on the budgetary implementation of expenditure of Section III of the budget, please refer to the EU budget 2009 Financial Report as well as the Commission's annual activity reports.

      title
      SEC(2010)0963
      type
      Non-legislative basic document published
      celexid
      CELEX:52010SC0963:EN
    body
    type
    Non-legislative basic document published
  • body
    EP
    date
    2010-07-20
    type
    Date
  • date
    2010-07-20
    docs
    • url
      http://www.europarl.europa.eu/registre/docs_autres_institutions/commission_europeenne/sec/2010/0963/COM_SEC(2010)0963_EN.pdf
      text
      • PURPOSE: presentation by the Commission of the consolidated annual accounts of the European Union for the financial year 2009, as part of the 2009 discharge procedure.

        Analysis of the accounts of the EU Institutions: Section III - European Commission.

        CONTENT: this Commission document sets out the consolidated annual accounts of the European Union for the financial year 2009 as prepared on the basis of the information presented by the institutions, organisations and bodies of the EU, in accordance with Article 129 (2) of the Financial Regulation applicable to the EU's General Budget, including the European Commission.

        The document helps to bring insight into the EU budget mechanism and the way in which the budget has been managed and spent in 2009. It recalls that European Union's operational expenditure covers the various headings of the financial framework and takes different forms, depending on how the money is paid out and managed.

        In accordance with the Financial Regulation, the Commission implements the general budget using the following methods:

        • direct centralised management: direct implementation of the budget by the Commission services;
        • indirect centralised management: the Commission confers tasks of implementation of the budget to bodies of EU law or national law, such as the EU agencies of public law or with public service missions;
        • decentralised management: the Commission delegates certain tasks for implementation of the budget to third countries;
        • shared management: under this method of management budget implementation tasks are delegated to Member States. The majority of the expenditure falls under this mode "Shared Management" involving the delegation of tasks to Member States, covering such areas as agricultural spending and Structural Actions;
        • joint management: under this method, the Commission entrusts certain implementation tasks to an international organisation.

        The document also presents the different financial actors involved in the budget process (accounting officers, internal officers and authorising officers) and recalls their respective roles in the context of the tasks of sound financial management.

        Amongst the other legal elements relating to the implementation of the EU budget presented in this document, the paper focuses on the following issues:

        ·         the way in which EU public expenditure is committed and spent;

        ·         the means of recovery following irregularities detected;

        ·         the modus operandi of the accounting system:

        ·         the audit process followed by the European Parliament's granting of the discharge.

        To recall, the final control is the discharge of the budget for a given financial year. The discharge represents the political aspect of the external control of budget implementation and is the decision by which the European Parliament, acting on a Council recommendation, "releases" the Commission from its responsibility for management of a given budget by marking the end of that budget's existence (please refer to the follow-up reports presented in this procedure file).

        Lastly, the document presents a series of tables and detailed technical indicators on (i) the balance sheet; (ii) the economic outturn account; (iii) cashflow tables; (iv) technical annexes concerning the financial statements.

        EU expenditure and recoveries of wrongly made payments: in addition to the legal elements on how EU expenses are implemented, the document highlights the basic accounting principles that govern the management and implementation of EU expenditure. Among the figures provided, the main issues concern the recovery of wrongly made payments (mainly in the agriculture or cohesion sectors).

        At 31 December 2009, the amount of EAGF expenditure subject to future corrections following audits which were not yet finalised totalled EUR 2.8 billion. At 31 December 2009, EUR 1.1 billion is estimated as the amount of potential financial corrections in the process of being decided.

        The document also clarifies the following:

        ·         undrawn commitments financial activities:undrawn commitments financial activities amounted to EUR 5 733 at 31 December 2009 (against EUR 4 885 million the previous year): the main amounts relate to Balance of Payments loan agreements signed in 2008 and 2009 but not yet disbursed before year-end;

        ·         budgetary commitments made, payments still pending: the budgetary RAL ("Reste à Liquider") is an amount representing the open commitments for which payments and/or de-commitments have not yet been made. At 31 December 2009 the budgetary RAL totalled EUR 177 272 million;

        ·         the amount of financial corrections: for 2009, the Commission was able to recover EUR 2 873 million in financial corrections and EUR 446 million in recoveries, totalling an amount of EUR 3 319 million (compared with EUR 2 873 million in 2008).

        Implementation of appropriations under Section III of the budget for the financial year 2009 : the annexes include the following tables:                       

        A) Table showing the commitment appropriations by heading (including the % of implementation):

        1. Sustainable growth: EUR 62 444 million (97.69%)
        2. Preservation & management of natural resources: EUR 61 484 million (98.03%)
        3. Citizenship, freedom, security and justice: EUR 2 264 million (97.27%)
        4. The EU as a global partner: EUR 8 481 million (97.34%)
        5. Administration: EUR 7 662 million (95.48%)
        6. Compensations: EUR 209 million (100%)

        Total commitments: EUR 142 545 million (97.69%).

        B) Table showing the implementation of payments by heading:

        1. Sustainable growth: EUR      44 684 million (94.03%)
        2. Preservation & management of natural resources: EUR 55 877 million (97.85%)
        3. Citizenship, freedom, security and justice: EUR 1 993 million (91.66%)
        4. The EU as a global partner: EUR 7 983 million (90.67%)
        5. Administration: EUR 7 615 million (86.99%)
        6. Compensations: EUR 209 million (100%)

        Total payments: EUR 118 361 million (95.03%).

        Lastly, the document states that the year 2009 saw the EU Budget still in transition, from one multi-annual Financial Framework to the next. Commitment appropriations reflected the spending orientations agreed for the new programming period 2007 - 2013, whereas the part of the payment claims still related to the previous 2000 - 2006 Financial Framework was close to 12%. For commitments, the initial budget and hence the political targets set were carried out virtually as planned. The implementation rate for payments, excluding unused Emergency Aid reserve, was 95% of the initial budget.

        For further details on the budgetary implementation of expenditure of Section III of the budget, please refer to the EU budget 2009 Financial Report as well as the Commission's annual activity reports.

      title
      SEC(2010)0963
      type
      Non-legislative basic document
      celexid
      CELEX:52010SC0963:EN
    body
    EC
    commission
    • DG
      Budget
      Commissioner
      ŠEMETA Algirdas
    type
    Non-legislative basic document
  • date
    2010-08-31
    docs
    body
    EC
    commission
    • DG
      Budget
      Commissioner
      ŠEMETA Algirdas
    type
    Document attached to the procedure
  • date
    2010-09-09
    docs
    body
    type
    Court of Auditors: opinion, report
  • date
    2010-10-07
    body
    EP
    type
    Committee referral announced in Parliament, 1st reading/single reading
    committees
  • body
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    meeting_id
    3045
    text
    • The Council took note of the presentation by the President of the Court of Auditors, Mr Vitor Caldeira, of the Court's annual report on the management of the EU's general budget.

      The report, which covers the budget for 2009, indicates progress in some areas of budgetary management, in particular as regards cohesion policy expenditure, though the Court's opinion on the legality and regularity of underlying transactions remains unfavourable as in previous years.

      The Council accordingly called on all parties involved in the management of the EU budget to persist in their efforts to improve controls and to reduce margins of error in budgetary payments.

      It asked the Permanent Representatives Committee to examine the report in greater detail, and to oversee the preparation of a recommendation to the European Parliament on the discharge to be given to the Commission for implementation of the 2009 budget.

      The Council is expected to adopt the recommendation at its meeting on 15 February 2011.

    council
    Economic and Financial Affairs ECOFIN
    date
    2010-11-17
    type
    Council Meeting
  • date
    2010-11-18
    docs
    body
    EC
    commission
    • DG
      Budget
      Commissioner
      ŠEMETA Algirdas
    type
    Document attached to the procedure
  • date
    2011-02-03
    docs
    • url
      http://register.consilium.europa.eu/servlet/driver?page=Result&lang=EN&typ=Advanced&cmsid=639&ff_COTE_DOCUMENT=5893%2F11&fc=REGAISEN&srm=25&md=100
      text
      • In accordance with Council Regulation (EC) No 58/2003 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes (see CNS/2000/0337) and with Commission regulation (EC) No 1653/2004 on a standard financial regulation for the executive agencies pursuant to Council Regulation (EC) No 58/2003 (as last amended by Commission Regulation (EC) No 651/2008 of 9 July 2008), the Council is required to draw up recommendations to the European Parliament on a discharge to be given to the executive agencies.

        Having examined the revenue and expenditure account for the financial year 2009 and the balance sheet at 31 December 2009 and the report by the Court of Auditors on the annual accounts of the Executive Agencies, the Council recommends that, in light of its examination, the European Parliament should give discharge to the Director of each Agency in respect of the implementation of the budget for the financial year 2009. It states that for each Agency the annual accounts present fairly, in all material aspects, the financial position as at 31 December 2009 and the results of operations and cash-flows for the year then ended, in accordance with the provisions of the Executive Agencies' Financial Regulation, and that, on the other hand, the underlying transactions for the financial year ended on 31 December 2009 are, in all material respects, legal and regular for the six Agencies.

        The Council considers that a certain number of observations should be taken into account when granting discharge:

        1. as regards the Education, Audiovisual and Culture Executive Agency, the Council reiterates its request to the Executive Agency to ensure more transparent and non-discriminatory recruitment procedures, by determining a priori the thresholds to be met by candidates to be invited to an interview or to be put on the reserve list;
        2. as regards the Executive Agency for Competitiveness and Innovation, the Council notes with concern that, similarly to previous years, the Executive Agency's initial budget for 2009 was reduced by almost 11% in the fourth quarter mainly due to overestimated staff needs. It invites both the Executive Agency and the Commission to adopt a more realistic and effective approach when planning activities and related resources. Furthermore, the Council is concerned about the shortcomings identified by the Court in the Executive Agency's recruitment procedures and recalls the need to ensure their full transparency;
        3. as regards the Executive Agency for Health and Consumers, the Council notes with concern that the level of carry-overs and the cancellation rate were high and calls on the Executive Agency to intensify its efforts to improve budget planning and mplementation, thus complying strictly with the budgetary principle of annuality;
        4. as regards the Trans-European Transport Network Executive Agency, the Council invites the Executive Agency to improve its financial programming, in order to limit the appropriations carried over to the next financial year to the minimum necessary, in line with the budgetary principle of annuality;
        5. as regards the Research Executive Agency, the Council calls on the Executive Agency to improve the various weaknesses identified by the Court in the planning of its activities and human resources, and to comply with the budgetary principle of annuality when implementing its budget. It calls on the Executive Agency to improve its procedures for the follow-up of the use of appropriations and to take all necessary steps in order to avoid irregular transactions and carry-overs. Lastly, it invites the Executive Agency to take duly into account the remarks made by the Court concerning the weaknesses identified in its recruitment procedures and in particular with regard to the selection process;
        6. as regards the European Research Council Executive Agency, the Council encourages the Executive Agency to continue to improve its budget forecasts management based on realistic assumptions. It notes the fact that the Executive Agency has in several situations not fully complied with the budgetary principle of annuality and welcomes the corrective measures suggested by the Executive Agency. Moreover it notes that the Executive Agency has put at risk the transparency of recruitment procedures by neither establishing the thresholds to be met, nor the maximum number of candidates to be put on the reserve lists, nor their period of validity. The Council stresses the need for justified and documented selection board decisions and for corrective measures to be put in place.
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      Supplementary non-legislative basic document
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      05893/2011
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      Committee draft report
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    2011-02-14
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    Deadline Amendments
  • date
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    text
    • The Committee on Budgetary Control adopted the report by Jorgo CHATZIMARKAKIS (ALDE, DE) recommending the European Parliament to grant the Commission discharge in respect of the implementation of the European Union general budget for the financial year 2008 as well as the Directors of the following executive Agencies: "Education, Audiovisual and Culture"; "Competitiveness and Innovation"; "Health and Consumers"; "Trans-European Transport" for the implementation of their respective budgets for the financial year 2009.

      The committee also recommends that the Parliament should close the accounts of the European Union general budget for the financial year 2009.

      In a series of general observations, Members make a certain number of recommendations that need to be borne in mind at the point of granting the discharge.

      1) Overall findings: Members are pleased to note that the annual accounts of the Union present fairly, in all material respects, the financial position of the Union as of 31 December 2009 and the results of operations and cash flows. However, they consider it abnormal for the annual accounts to be presented with negative own capital of EUR 44.7 billion and wonder whether the amounts to be requested from Member States should not be entered as assets, given that the estimated EUR 37 billion in staff pensions is clearly a commitment.

      As far as the Statement of Assurance is concerned, Members call on the Court of Auditors to provide it with, in the future, a single Statement of Assurance regarding the legality and regularity of the underlying transactions in the same way that it does for the reliability of the accounts.

      Legality and regularity: Members note that while the Commission implements the Union budget on its own responsibility, in the present understanding of 'shared management' most of the management functions are carried out by national bodies not directly accountable at Union level and over which the Commission has limited powers of enforcement. Members take the view therefore that these bodies are meant to be directly accountable at Union level to the Commission. As a result, they call for, as regards shared-management controls, cooperation to be stepped up between national audit bodies and the Court of Auditors. They also propose the examination of the possibility of national audit bodies, in their capacity as independent external auditors, issuing national audit certificates for the management of Union funds, which would be submitted to Member State governments. Members recall, in this regard, that the Member States have primary responsibility for day-to-day management and control of Union expenditure under shared management.

      As regards the other aspects of the Statement of Assurance, Members note that payments for the policy groups 'Agriculture and natural resources', 'Cohesion', 'Research, energy and transport', 'External Aid, development and enlargement' and 'Education and citizenship' are materially affected by error and that the supervisory and control systems are only 'partially effective'. They recall that, according to the Court, the error rate is probably between 2% and 5% for the policy groups 'Agriculture and natural resources' resources' (EUR 56 318 000 000), 'Research, energy and transport' (EUR 7 966 000 000), 'External Aid, development and enlargement' (EUR 6 596 000 000) and 'Education and Citizenship' (EUR 2 153 000 000). The most likely error rate in payments estimated by the Court of Auditors for the policy group 'Cohesion' (EUR 23 081 000 000 reimbursed certified expenditure) is above 5%.

      Given these recurring problems, Members call on the Commission and the Member States to make annual improvements in the most likely error rates in implementing the EU budget, the aim being to bring the rate below the materiality threshold, thus securing a positive declaration of assurance from the Court of Auditors. They recall their repeated invitations to the Commission to present a proposal for the introduction of mandatory national management declarations (NMDs) issued and signed at ministerial level, made public and duly audited by an independent auditor. A proposal is awaited in September 2011.

      Recovery mechanism: Members welcome the fact that the Commission has responded to Parliament's requests by including more detailed information about recoveries and financial corrections. For the policy group 'Cohesion' merely 20% of the amounts confirmed in 2009 have been implemented and a total amount of EUR 2 332 000 000 of corrections still remain to be implemented at year-end 2009. They note that the vast majority of the corrections by value involve financial corrections on the Member States or third countries, rather than recoveries from individual beneficiaries who received Union funds incorrectly. They consider that future rules applicable to the Union budget and programmes should provide that unspent Union funds are not returned to the Member States if a Member State has not paid back to the Union amounts incorrectly received. Members suspect that, under the present system, which does not include finesand makes it possible to substitute most of the expenditure found to be ineligible by the Commission or the Court of Auditors, the Member States seem to have limited interest in developing efficient control systems that could result in a reduction of their share of Union spending. They reiterate their view that reallocation of ineligible expenditure should only be allowed if it was discovered by the Member States themselves. Members welcome the fact that the Commission has made use of the new possibility to immediately suspend payments, in the case of doubt.

      Responsibility and transparency: given what may often be large differences between the Member States' systems of control, Members call on the Commission to make available clear evaluations of efforts by the Member States to detect irregularities so as to make sure that those Member States detecting higher irregularities due to more onerous control systems are not discredited at any point. They ask the Court of Auditorsto deliver an opinion on the quality of the national audit authorities as regards shared management, with particular reference to technical expertise and independence. Members believe that it is of utmost importance to analyse if certain errors occur in all the Member States with more or less the same frequency and how to deal with this. They also stress the need for transparency in the way that Union expenditures are implemented by Member States. In this regard, they call on the Commission to make the Member States' annual summaries publicly available as part of next year's discharge procedure and upgrade the information provided in these summaries to present a meaningful picture of the Member States' financial management performance.

      Tolerable risk of error: Members believe that control systems cannot aim at zero risk in all spending areas, not only because it would be extremely expensive, but also because it is unlikely that zero risk in all spending areas will ever be achieved. They accept that a certain risk of error will always exist when implementing any spending programmes. They emphasise that tolerating risk is not the same as tolerating error and reaffirm that the Commission must pursue a zero-tolerance approach to all cases of mismanagement and fraud. They invite the Commission to identify weaknesses in present management and control systems as well as to analyse the cost and benefits of various possible changes. Members call for a study of the distinction between the materiality threshold, which is associated with the holding of an audit and therefore subject to assessment by the Court of Auditors, and the acceptable error rate, which is a concept associated with internal audits for which the Commission is responsible.

      Members also call for:

      • the strengthening of the Commission's Internal Audit Service (IAS);
      • the introduction of a single audit model whereby audits are carried out, recorded and reported to a common standard (single audit);
      • transparency measures with the creation of a single and comprehensive online system (a central database) which can be accessed easily by any individual and would therefore allow the public to have easy access to full and complete information about the expenditure of the Union by budget line and by beneficiary;
      • the review of the evaluation systems which evaluate the effectiveness of expenditure programmes to assess whether they are adding value, delivering value for money, and achieving the objectives for which they were established.

      In addition, Members touch upon the sensitive issue of whistleblowing. They call for a reform of the Staff Regulations given that they contain out-dated perks and benefits. In this respect, the Commission is urged to remove out-dated provisions like a distance-related travel allowance and additional travel-days.

      2) Specific findings: Members make a series of comments on the main areas of expenditure which were problematic during 2009:

      • Agriculture and natural resources (EUR 56.3 billion): Members welcome the fact that the Commission has succeeded in bringing the error rate down to around 2% in recent years. However, they note that the error rate increased slightly in 2009. The report calls upon the Commission to take steps to ensure that the reduction in the error rate becomes a trend that is maintained year-on-year so as to ensure that the irregularities cease. Measures are proposed on a technical level to improve the reliability of controls, review and improve the guidelines as regards the work to be performed by certification bodies, and further reduce bureaucracy by simplifying procedures.
      • Cohesion (EUR 35.5 billion): Members recall that management of Cohesion spending is shared with the Member States, that expenditure takes place through a large number of multi-annual operational programmes (OPs). Member States co-finance the projects under Cohesion spending. The report notes that the Court of Auditors estimates that the most likely error rate for the Cohesion policy area is above 5% and that the frequency of errors continues to decrease for the third consecutive year. Once again, Members note the complexity of the regulatory framework of Cohesion, requiring conformity with a number of different levels of power. They note that a major proportion of the estimated error rate is attributable to eligibility errors and serious failures to respect public procurement rules. Member States are called upon to cooperate with the Commission to overcome the difficulties identified. The report stresses that the Member States' administrations are, to a high degree, stakeholders of policies they implement in shared management. Members invite the Commission, in connection with the revision of the Financial Regulation, to look into the effectiveness of NMDs as incentives and/or deterrents and the advantages and improvements they could bring in terms of sound financial management. Such an instrument should enable the Commission to fulfil its duty to supervise the Member States and to ensure an effective functioning of the national management and control systems. The obligation to publish the NMDs should also promote a greater level of responsibility and accountability of national authorities.
      • Research, energy and transport (EUR 8 billion): Members recall that the majority of expenditure for this policy group is implemented by the Commission under direct centralised management and, increasingly, by indirect centralised management through agencies and Joint Undertakings. The most likely error rate estimated by the Court of Auditors for this policy area is between 2% and 5% and that the main source of error in this policy group remains the reimbursement of overstated personnel and indirect costs to research projects. Members are worried about the fact that the Court of Auditors found errors in 43% of the audited cost statements - both in 2009 as well as in 2008. They invite the Commission to ensure that the independent auditors who have incorrectly certified cost statements are made aware of the eligibility criteria for declared costs. Research funding rules should be further simplified. The report asks the Commission rapidly to resolve prior situations and to base the FP8 on a radical change of view including the introduction of a bonus system partially replacing the current upfront payment system and better access to venture capital in order to enhance efficiency.
      • External aid, Development and Enlargement (EUR 6.6 billion): Members recall that the majority of the expenditure in this policy area is subject to direct centralised management by Commission services. The most likely error rate estimated by the Court of Auditors for the audited domain is between 2% and 5%. The Commission is asked to closely cooperate with candidate and potential candidate countries in order to effectively improve management and control systems, to promote best practices for fighting fraud. Overall, although the control systems work well, Members call on specific DGs to review their control methods.
      • Education and Citizenship (EUR 2.2 billion): the majority of expenditure in this area is managed by indirect centralised management or through shared management. The error rate for closures to be between 2% and 5% and that the supervisory and control systems for this policy area were only partially effective in ensuring the regularity of closures made in 2009. They invite the Commission to continue to reinforce the checks on closures to ensure that errors are detected and corrected and prevent the reoccurrence of previously identified errors.
      • Economic and Financial Affairs (EUR 700 million): Members recall that the majority of the actions under FP6, FP7 and CIP are funded through a grant agreement with the Commission, and that grants are paid out as follows: an advance when the grant agreement is signed, followed by interim and final payments which reimburse eligible expenditure on the basis of cost statements submitted by the beneficiaries. In this context, the main risk to regularity is that eligible costs in the cost statements are overstated and that this is not detected by the Commission's supervisory and control systems. Members call on the Commission to examine a series of measures aiming to improve the quality of its ex-ante controls on the procurement procedures.

      3) Priority actions: Members call on the Commission to present to Parliament's competent committee a plan presenting the actions that it intends to take regarding national management declarations (NMDs), the completion of the Commission's governance structure, systematic interruption and suspension of payments as well as lifting of the measure and the improvement of the corrective mechanisms. They also call, in particular, for the reform of the current discharge procedure. The Commission is called upon to organise an interinstitutional discussion with a view to embarking on a comprehensive debate on the current discharge procedure system. Proposals should be put forward proposals for reducing the periods involved in the discharge process, so that the vote in plenary can be held in the year following the financial year under review.

      Members also focus on the following issues:

      • national management declarations which are to be understood as an instrument facilitating greater national accountability for Union spending by giving both national parliaments and national audit institutions an opportunity to participate in ensuring legality, regularity and performance of Union spending. These declarations should be issued and signed by each national finance minister. These declarations already exist in some Member States (namely Denmark, the Netherlands, the United Kingdom and Sweden). A formal proposal for the introduction of mandatory NMDs shall be presented by the Commission;
      • completion of the Commission's governance structure: the Commission is invited to complete its governance structure by adding the signature of the responsible Commissioner to the Director-General's Annual Activity Report and by having the Synthesis Report - which also shall include a "scoreboard" on the quality of controls per Member State and policy area - signed by the President of the European Commission;
      • systematic activation of interruption and suspension of payments as well as lifting of the measure: Members invite the Commission to introduce a systematic activation of interruptions and suspensions of payments as soon as evidence suggests a significant deficiency in the functioning of the Member States' management and control systems;
      • improvement of corrective mechanisms: the report insists that the Commission improve the corrective mechanisms ensuring that the financial consequences of incorrectly made payments are borne by the beneficiaries and not the taxpayers;
      • establishment of a performance evaluator: the Commission is invited to appoint a "performance evaluator" with responsibility for the preparation of the evaluation report. The report shall be drawn up so that the relation between the key performance indicators, their legal/political basis, the amount of expenditure and the results achieved is clear and transparent, that the methodology to be used for the production of this report should be audited by the IAS which should also assess the work done, and that the key performance indicators used by all departments in the Commission shall be publicly available. It should be presented in Plenary;
      • introduction of a new spending logic: lastly, Members call for the introduction of a new spending logic aimed at improving the quality of spending and ensuring that funds provided by Union taxpayers are spent both correctly and wisely.
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    • PURPOSE: to grant discharge to the European Commission in respect of the implementation of the general budget of the European Union for the financial year 2009.

      NON-LEGISLATIVE ACT: Decision 2011/550/Euratom on discharge in respect of the implementation of the general budget of the European Union for the financial year 2009, Section III – Commission.

      CONTENT: with the present decision, the European Parliament grants discharge to the Commission on the implementation of the general budget of the European Union for the financial year 2009.

      A parallel decision definitively closes the accounts for 2009.

      In the resolution annexed to the discharge decision, the European Parliament is pleased to note that the annual accounts of the Union present fairly, in all material respects, the financial position of the Union as of 31 December 2009 and the results of operations and cash flows. However, Parliament notes that payments for the policy groups ‘Agriculture and natural resources’, ‘Cohesion’, ‘Research, energy and transport’, ‘External Aid, development and enlargement’ and ‘Education and citizenship’ are materially affected by error and that the supervisory and control systems are only ‘partially effective’ in preventing or detecting and correcting the reimbursement of overstated or ineligible costs.

      If the Commission implements the Union budget on its own responsibility, in the present understanding of ‘shared management’, most of the management functions are carried out by national bodies not directly accountable at Union level and over which the Commission has limited powers of enforcement. Parliament takes the view therefore that these bodies are meant to be directly accountable at Union level to the Commission. It calls, as regards shared-management controls, for cooperation to be stepped up between national audit bodies and the Court of Auditors.

      Parliament also makes a number of other observations in the resolution annexed to the discharge decision. For details of the content of these observations, please refer to the summary of the opinion dated 10 May 2011.

      It should also be noted that with Decisions 2011/551/EU, Euratom; 2011/552/EU, Euratom; 2011/553/EU, Euratom; 2011/554/EU, Euratom; 2011/555/EU, Euratom and 2011/556/EU, Euratom, the European Parliament also grants discharge to the directors of the executive agencies "Education, Audiovisual and Culture"; "Competitiveness and Innovation"; "Health and Consumers"; "Trans-European Transport" and "Research" for the implementation of their respective budgets for the financial year 2009.

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2009 discharge: EU general budget, Section III, Commission
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© European Union, 2011 – Source: European Parliament