PURPOSE: to grant discharge to the European Railways Agency (ERA) for the financial year 2012.

NON-LEGISLATIVE ACT: Decision 2014/599/EU of the European Parliament on discharge in respect of the implementation of the budget of the European Railways Agency for the financial year 2012.

CONTENT: with the present decision, the European Parliament grants discharge to the Executive Director of the European Railways Agency for the implementation of its budget for the financial year 2012.

This decision is in line with the European Parliament's resolution adopted on 3 April 2014 and comprises a series of observations that form an integral part of the discharge decision (please refer to the summary of the opinion of 3 April 2014).

Amongst the main observations made, Parliament deplored the fact that using two locations (Lille and Valenciennes) to carry out its activities exposes the Agency to additional costs. It called for a single location for the Agency, in a place easily accessible by public transport.

The European Parliament adopted a decision concerning the discharge to be granted to the Executive Director of the European Railway Agency (ERA) in respect of the implementation of the Agency's budget for the financial year 2012. The vote on the discharge decision approved the closure of the accounts (in accordance with Annex VI, Article 5(1) of the Rules of Procedure of the European Parliament.

Noting that the Court of Auditors stated that it has obtained reasonable assurances that the annual accounts of the Agency for the financial year 2012 are reliable, and that the underlying transactions are legal and regular, Parliament adopted by 508 votes to 66, with 11 abstentions, a resolution containing a series of recommendations that form an integral part of the discharge decision and as well as the general recommendations that appear in the draft resolution on performance, financial management and control of EU agencies.

These recommendations are summarised as follows:

Budget and financial management : Parliament noted that budget monitoring efforts during the financial year 2012 resulted in a budget implementation rate of 94.92% and that the payment appropriations execution rate was 85.63%. Two locations : Parliament deplored the fact that using two locations (Lille and Valenciennes) to carry out its activities exposes the Agency to additional costs. It acknowledged the efforts made by the Agency to minimise the negative impact of the decision on its seat and called for a single location for the Agency, in a place easily accessible by public transport in order to save scare resources and increase its efficiency. Performance : Parliament requested that the Agency communicate the results and impact its work has on European citizens in an accessible way, mainly through its website.

It also made a series of observations on transfers, procurement and recruitment procedures as well as comments on internal controls.

Lastly, Parliament stated that the Agency should review its policy on the prevention and management of conflicts of interests in 2014 on the basis of Commission's Guidelines on the matter.

The Committee on Budgetary Control adopted the report by Petri SARVAMAA (EPP, FI) in which it recommended the European Parliament to grant discharge to the Executive Director of the European Railway Agency (ERA) in respect of the implementation of the Agency's budget for the financial year 2012.

Noting that the Court of Auditors stated that it has obtained reasonable assurances that the annual accounts of the Agency for the financial year 2012 are reliable, and that the underlying transactions are legal and regular, Members approved the closure of ERA’s accounts. They made, however, a number of recommendations that needed to be taken into account when the discharge is granted, in addition to the general recommendations that appear in the draft resolution on performance, financial management and control of EU agencies.

Budget and financial management : Members noted that budget monitoring efforts during the financial year 2012 resulted in a budget implementation rate of 94.92% and that the payment appropriations execution rate was 85.63%. Two locations : Members deplored the fact that using two locations (Lille and Valenciennes) to carry out its activities exposes the Agency to additional costs. They acknowledged the efforts made by the Agency to minimise the negative impact of the decision on its seat and called for a single location for the Agency, in a place easily accessible by public transport in order to save scare resources and increase its efficiency.

Members also made a series of observations on transfers, procurement and recruitment procedures as well as comments on internal controls.

Lastly, Members stated that the Agency should review its policy on the prevention and management of conflicts of interests in 2014 on the basis of Commission's Guidelines on the matter and inform the discharge authority on the assessment results once available.

Having examined the revenue and expenditure accounts for the financial year 2012 and the balance sheet at 31 December 2012 of the European Railway Agency (ERA), as well as the Court of Auditors' report on the annual accounts of the Agency for the financial year 2012, accompanied by the Agency's replies to the Court's observations, the Council recommends the European Parliament to give a discharge to the Executive Director of the Agency in respect of the implementation of the budget for the financial year 2012.

The observations in the Court of Auditors' report in relation to the financial year 2012 call for some comments by the Council, which may be summarised as follows:

in general, the Council welcomes the Court's opinion that, in all material respects, the Agency's annual accounts present fairly its financial position as at 31 December 2012 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of the Agency's Financial Regulation and the accounting rules adopted by the Commission's accounting officer, and that the underlying transactions for that financial year are legal and regular.

Control : notwithstanding this favourable opinion, the Council notes with concern the weaknesses identified by the Court in relation to the Agency's internal audit function and the control of family allowances. It urges the Agency to take corrective actions without delay. The Council also invites the Agency to follow the recommendation made by the Court and to take the appropriate measures to ensure that the IT Business Continuity and Disaster Recovery Plan is approved and established.

PURPOSE: presentation of the EU Court of Auditors’ report on the annual accounts of the European Railway Agency (ERA) for the year 2012, together with the Agency’s reply.

CONTENT: in accordance with the tasks conferred on the Court of Auditors by the Treaty on the Functioning of the European Union, the Court presents to the European Parliament and to the Council, in the context of the discharge procedure, a Statement of Assurance as to the reliability of the annual accounts of each institution, body or agency of the EU, and the legality and regularity of the transactions underlying them, on the basis of an independent external audit.

This audit concerned, amongst others, the annual accounts of the European Railway Agency (ERA).

In the Court’s opinion, ERA’s Annual Accounts fairly present, in all material respects, its financial position as of 31 December 2012 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its Financial Regulation and the accounting rules adopted by the Commission’s accounting officer.

The Court also considers that the transactions underlying the annual accounts of the Agency for the financial year ended 31 December 2012 are, in all material respects, legal and regular.

The report confirms that the Agency’s 2012 budget amounted to EUR 25.8 million.

The report also makes a series of observations on the budgetary and financial management of the Agency, accompanied by the latter’s response. The main observations may be summarised as follows:

The Court’s observations :

Audit and internal controls: the Court states that the Agency has suppressed the internal audit capability and has replaced it with an internal control coordinator. The Agency does not comply with its internal control standard regarding business continuity.

The Agency’s reply:

· audits : the Agency is planning to recruit an internal control coordinator before autumn 2013. This will be a separate function and as such, the independence of the person exercising this role will be ensured. The Commission Internal audit Service continues to be the Internal auditor of the Agency today and also for the future. It performs regular internal audits within the Agency.

Lastly, the Court of Auditors’ report contains a summary of the Agency’s activities in 2012 . This is focused on the adoption of recommendations on:

· safety certification ;

· safety regulation, including evaluating the way national safety rules are made available, and examination of the transposition of the Railway Safety Directive in the Member States ;

· safety assessment, including common safety methods ;

· technical specifications for interoperability.

It has also drawn up reports on common approaches with regard to vocational competencies and a reference document of national rules for vehicle authorisation and classification of their equivalence for cross acceptance.