PURPOSE: to grant discharge to the Court of Auditors for the 2005 financial year.

LEGISLATIVE ACT: Decision 2008/502/EC of the European Parliament on the discharge for implementation of the European Union general budget for the financial year 2005 (Section V - Court of Auditors).

CONTENT: with the present decision, the European Parliament grants the Secretary-General of the Court of Auditors discharge in respect of the implementation of the budget for the financial year 2005.

This decision is in line with the European Parliament’s resolution adopted on 24 April 2007 and comprises a series of observations that form an integral part of the discharge decision (please refer to the summary of the opinion of 24/04/2007).

Budget 2008/502
OJ L 187 15.07.2008, p. 0061

SP(2007)2625/2

Results of vote in Parliament

Debate in Parliament

The European Parliament adopted a resolution drafted Daniel CASPARY (EPP-ED, D), and granted the Court of Auditors' Secretary-General discharge for the implementation of the Court of Auditors budget for the financial year 2005. In doing so, it made a number of observations on the discharge in its accompanying resolution.

Parliament began by noting that in 2005 the European Court of Auditors (ECA) had available commitment appropriations amounting to a total of EUR 107 548 618,24 with a utilisation rate of 87,22%. Following the introduction of accrual accounting with effect from 1 January 2005, the ECA's 2005 financial statements disclose a negative economic out-turn for the year (EUR 16 820 000) and an excess of liabilities over assets of EUR 11 450 000. It recalled that for the financial year 2005 the ECA's accounts were audited by an external firm, KPMG, which signed off on the accounts subject to the effect of any rectifications that might prove necessary with respect to the treatment given to the ECA's Members' pensions, bearing in mind that the relevant accounting standard No 12 was then being revised. Parliament believed that both the liability for future pension payments and also the long-term claim against the Member States should be included in the balance sheet in order to reflect the principles of accrual accounting applicable from 1 January 2005.

It went on to note with concern the ECA's difficulty in recruiting qualified staff for several posts. It reiterated its hope that it would be possible to devise a more rational structure for the ECA before the next enlargement, and asked the ECA to consider existing models with a view to reducing the total number of ECA Members. There should be a consideration of proposals to introduce a rotating system similar to that applying to the Governing Council of the ECB or a system with a single Auditor-General.

Parliament also noted that the ECA' decided in 2005, to begin a self-assessment exercise and that, following that self-assessment, an action plan had been adopted by the ECA, with actions covering broad areas such as mission and strategic objectives, programming and performance measuring, audit methodology, human resource strategy, internal and external communication and administrative procedures. This action plan will be subjected to a "peer review".

In relation to declarations of Members' financial interests, Parliament noted that ECA Members communicate a declaration of their financial interests and other assets. As a matter of principle and in the interests of transparency, Members of all EU institutions should be required to submit a declaration of financial interests which should be accessible on the Internet via a public register. Parliament called on the ECA to inform Parliament by 30 September 2007 of what appropriate measures it will take.

T6-0108/2007

A6-0107/2007

A6-0107/2007

The committee adopted the report by Daniel CASPARY ( EPP-ED , DE ) granting discharge to the European Court of Auditors for 2005. In its accompanying resolution, the committee reiterated Parliament’s hope that it would be possible to devise "a more rational structure" for the ECA before the next enlargement, and asked the Court to consider existing models with a view to reducing the total number of its members, including the possibility of a rotating system similar to that applying to the Governing Council of the European Central Bank or a system with a single Auditor-General.

The report noted that declarations of ECA Members’ financial interests were kept "under confidential custody" by the ECA President, and stated that, as a matter of principle and in the interests of transparency, such declarations should be submitted by Members of all EU institutions and should be accessible on the Internet via a public register.

Lastly, the report noted with concern the ECA’s difficulty in recruiting qualified staff for several posts from the competitions organised by EPSO.

PE386.385

PE382.614

PURPOSE : to present the Court of Auditors’ report on the implementation of the 2005 budget (other institutions – Court of Auditors).

CONTENT : in its 29th Annual Report on the implementation of the general budget of the European Union, the Court highlights that 2005 was the first full year in which the European Union had 25 Members. The Court’s audit did not reveal any material errors concerning the legality and regularity of underlying transactions.

Supervisory and control systems : i n 2005 all the Institutions had supervisory and control systems complying with the requirements of the new Financial Regulation. However, some Institutions had not fully implemented all their Internal Control Standards (in particular the Council).

Also in 2005, the NAP (Nouvelle Application Paie), a computer application for calculating staff remunerations created in 2003 and managed by the Commission Paymaster Office (PMO), was being used by all the Institutions. The technical weaknesses noted in 2004 were overcome, minimising the risk of erroneous calculation of the various elements of staff remuneration. However, the institutions did not systematically use the reporting facilities of NAP in order to verify, before the final pay run, all the data concerning situations specific to individual members of staff. Although not mandatory pursuant to the Financial Regulation, ex-post controls would increase the reliability of the administrative procedures for managing staff remunerations and help to uncover possible weaknesses and errors in the system.

Staff Regulations : the amended Staff Regulations, which entered into force on 1 May 2004, state that accommodation costs incurred on mission are reimbursed up to a maximum fixed for each country. Contrary to this rule, all the Institutions, except the Court of Justice, the Court of Auditors and the Ombudsman, provided in their internal rules for the payment of a flat-rate sum, ranging from 30 to 60 % of the maximum allowable amount, to staff who do not produce any evidence of having incurred accommodation costs. After the publication of the European Court of Auditors’ Annual Report concerning the financial year 2004, the European Economic and Social Committee amended its internal rules in December 2005 in order to ensure compliance with the Staff Regulations.

Specific remarks concerning the Court of Auditors : to recall, the Court’s administrative expenditure totalled EUR 92 million in 2005. The Court states that it was audited by an independent external audit firm which issued a ‘certificate concerning the regularity and fairness of the financial statements at 31 December 2005’, accompanied by a ‘report on the administrative and accounting procedures, the soundness of the financial management and the internal control system’. The report states that, in the auditor’s opinion, his work did not ‘disclose any facts which might cast doubt on the adequacy of the administrative and acounting procedures or internal control or the compliance of financial management with the applicable regulations’. The certificate and the report will be published in the Official Journal.

General conclusions : the Court states that improvements have been made by all the Institutions in order to adapt their supervisory and control systems to the requirements of the new Financial Regulation. The Court’s audit found that, notwithstanding the weaknesses mentioned in the previous paragraphs, the supervisory and control systems were adequate to manage the risk as regards legality and regularity of the transactions underlying the accounts of the Institutions’ administrative expenditure. The Court’s audit did not reveal material errors affecting the legality and regularity of the administrative expenditure.

N6-0039/2006
OJ C 263 31.10.2006, p. 0001

PURPOSE: presentation of the final annual accounts of the European Community for the financial year 2005 – Other institutions: Section V – Court of Auditors.

CONTENT: this document sets out the amount of expenditure and the financial statement of the Court of Auditors for 2005 and presents an analysis of its financial management. The available appropriations set out in the Court’s 2005 budget amounted to EUR 107 million , with an 87% utilisation rate.

Main axes of 2005 expenditure : budget implementation of the Court can be characterised by the under-utilisation of staff costs and associated costs (meetings, etc).

Amendments to budget : in the course of the year, the Court effected 15 budgetary transfers in all for a combined total of EUR 2 118 318. These transfers were undertaken to ensure the smooth working of the various departments of the Court and meet any requirements this entailed.

There were

2 chapter to chapter transfers for EUR 242 000 ; 5 article to article transfers for EUR 1 681 700; 9 item to item transfers amounting to EUR 194 618.

Overall the expenditure for 2005 totalled EUR 87 114 873, equivalent to 81.45% of the final appropriations. The cancellation of a total of EUR 13 519 727, i.e. 12.64% was the result, for the most part, of EUR 11 138 899 worth of cancellations within chapter 11 – Staff in active employment.

Other important issues of the budget implementation can be summarised as follows :

Title I (Staff costs): appropriations under this heading were utilised at 86%. This is due to :

delays in anticipated recruitment; mission costs; exchange of civil servants and experts (59.95%): this rate of almost 60% demonstrates a stronger uptake in 2005, when compared to a utilisation rate in 2004 of 26.69%. There are clear indications that the detached national experts scheme launched by the Court in 2004 is beginning to gather momentum and higher utilisation rates can be expected in the future.

Title II (Operational expenditure): there has been a major reduction in the costs relating to the organisation of meetings (44.06%). This under-use can be attributed to the fact that there was less expenditure than originally foreseen related to meetings of the ‘Contact’ committee and sub-committees. The rate of publishing and communication also slowed down (59.78%).

Building policy : on the Court’s extension in Luxembourg (building K.2), it has been in construction since 2001 and was satisfactorily completed in 2004. It was occupied in 2003, ahead of the scheduled date of June 2004. The accounts for the project are in the process of being closed and a full report will be provided to the budgetary authority in due course.

The special bank account set up for the project was set up and underpinned by a bank guarantee of EUR 10 million. In 2005, EUR 52 652 of interest was earned on this account. At the balance sheet date the unused balance of EUR 2 003 810 had been repaid to the Court (EUR 1 841 810 taken into budgetary revenue and EUR 162 000 put on a suspense account until certain outstanding matters are finalised). The guarantee, being no longer necessary, was returned.

For further details concerning the Court’s budget in 2005, please refer to the annexed detailed analysis of expenditure.

EUR-Lex
OJ C 263 31.10.2006, p. 0001
SEC(2006)0915

PURPOSE: presentation of the final annual accounts of the European Community for the financial year 2005 – Other institutions: Section V – Court of Auditors.

CONTENT: this document sets out the amount of expenditure and the financial statement of the Court of Auditors for 2005 and presents an analysis of its financial management. The available appropriations set out in the Court’s 2005 budget amounted to EUR 107 million , with an 87% utilisation rate.

Main axes of 2005 expenditure : budget implementation of the Court can be characterised by the under-utilisation of staff costs and associated costs (meetings, etc).

Amendments to budget : in the course of the year, the Court effected 15 budgetary transfers in all for a combined total of EUR 2 118 318. These transfers were undertaken to ensure the smooth working of the various departments of the Court and meet any requirements this entailed.

There were

2 chapter to chapter transfers for EUR 242 000 ; 5 article to article transfers for EUR 1 681 700; 9 item to item transfers amounting to EUR 194 618.

Overall the expenditure for 2005 totalled EUR 87 114 873, equivalent to 81.45% of the final appropriations. The cancellation of a total of EUR 13 519 727, i.e. 12.64% was the result, for the most part, of EUR 11 138 899 worth of cancellations within chapter 11 – Staff in active employment.

Other important issues of the budget implementation can be summarised as follows :

Title I (Staff costs): appropriations under this heading were utilised at 86%. This is due to :

delays in anticipated recruitment; mission costs; exchange of civil servants and experts (59.95%): this rate of almost 60% demonstrates a stronger uptake in 2005, when compared to a utilisation rate in 2004 of 26.69%. There are clear indications that the detached national experts scheme launched by the Court in 2004 is beginning to gather momentum and higher utilisation rates can be expected in the future.

Title II (Operational expenditure): there has been a major reduction in the costs relating to the organisation of meetings (44.06%). This under-use can be attributed to the fact that there was less expenditure than originally foreseen related to meetings of the ‘Contact’ committee and sub-committees. The rate of publishing and communication also slowed down (59.78%).

Building policy : on the Court’s extension in Luxembourg (building K.2), it has been in construction since 2001 and was satisfactorily completed in 2004. It was occupied in 2003, ahead of the scheduled date of June 2004. The accounts for the project are in the process of being closed and a full report will be provided to the budgetary authority in due course.

The special bank account set up for the project was set up and underpinned by a bank guarantee of EUR 10 million. In 2005, EUR 52 652 of interest was earned on this account. At the balance sheet date the unused balance of EUR 2 003 810 had been repaid to the Court (EUR 1 841 810 taken into budgetary revenue and EUR 162 000 put on a suspense account until certain outstanding matters are finalised). The guarantee, being no longer necessary, was returned.

For further details concerning the Court’s budget in 2005, please refer to the annexed detailed analysis of expenditure.

EUR-Lex
SEC(2006)0915