title: 2012/618/EU: Decision of the European Parliament of 10 May 2012 on discharge in respect of the implementation of the budget of the European Environment Agency for the financial year 2010#Resolution of the European Parliament of 10 May 2012 with observations forming an integral part of its Decision on discharge in respect of the implementation of the budget of the European Environment Agency for the financial year 2010

text:
               17.10.2012

               EN

               Official Journal of the European Union

               L 286/356

         DECISION OF THE EUROPEAN PARLIAMENT
   of 10 May 2012
   on discharge in respect of the implementation of the budget of the European Environment Agency for the financial year 2010
   (2012/618/EU)
   THE EUROPEAN PARLIAMENT,

               —

               having regard to the final annual accounts of the European Environment Agency for the financial year 2010,

               —

               having regard to the Court of Auditors’ report on the annual accounts of the European Environment Agency for the financial year 2010, together with the Agency’s replies (1),

               —

               having regard to the Council’s recommendation of 21 February 2012 (06083/2012 – C7-0051/2012),

               —

               having regard to Article 319 of the Treaty on the Functioning of the European Union,

               —

               having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (2), and in particular Article 185 thereof,

               —

               having regard to Council Regulation (EEC) No 1210/90 of 7 May 1990 on the establishment of the European Environment Agency and the European Environment Information and Observation Network (3), and in particular Article 13 thereof,

               —

               having regard to Regulation (EC) No 401/2009 of the European Parliament and of the Council of 23 April 2009 on the European Environment Agency and the European Environment Information and Observation Network (4), and in particular Article 13 thereof,

               —

               having regard to Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (5), and in particular Article 94 thereof,

               —

               having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,

               —

               having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on the Environment, Public Health and Food Safety (A7-0105/2012),

               1.

               Postpones its decision on granting the Executive Director of the European Environment Agency discharge in respect of the implementation of the Agency’s budget for the financial year 2010;

               2.

               Sets out its observations in the Resolution below;

               3.

               Instructs its President to forward this Decision and the resolution that forms an integral part of it to the Executive Director of the European Environment Agency, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

            The President

         Martin SCHULZ

            The Secretary-General

         Klaus WELLE

      (1)  OJ C 366, 15.12.2011, p. 57.

      (2)  OJ L 248, 16.9.2002, p. 1.

      (3)  OJ L 120, 11.5.1990, p. 1.

      (4)  OJ L 126, 21.5.2009, p. 13.

      (5)  OJ L 357, 31.12.2002, p. 72.

      RESOLUTION OF THE EUROPEAN PARLIAMENT
      of 10 May 2012
      with observations forming an integral part of its Decision on discharge in respect of the implementation of the budget of the European Environment Agency for the financial year 2010
      THE EUROPEAN PARLIAMENT,

                  —

                  having regard to the final annual accounts of the European Environment Agency for the financial year 2010,

                  —

                  having regard to the Court of Auditors’ report on the annual accounts of the European Environment Agency for the financial year 2010, together with the Agency’s replies (1),

                  —

                  having regard to the Council’s recommendation of 21 February 2012 (06083/2012 – C7-0051/2012),

                  —

                  having regard to Article 319 of the Treaty on the Functioning of the European Union,

                  —

                  having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (2), and in particular Article 185 thereof,

                  —

                  having regard to Council Regulation (EEC) No 1210/90 of 7 May 1990 on the establishment of the European Environment Agency and the European Environment Information and Observation Network (3), and in particular Article 13 thereof,

                  —

                  having regard to Regulation (EC) No 401/2009 of the European Parliament and of the Council of 23 April 2009 on the European Environment Agency and the European Environment Information and Observation Network (4), and in particular Article 13 thereof,

                  —

                  having regard to Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (5), and in particular Article 94 thereof,

                  —

                  having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,

                  —

                  having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on the Environment, Public Health and Food Safety (A7-0105/2012),

                  A.

                  whereas the Court of Auditors has stated that it has obtained reasonable assurances that the annual accounts for the financial year 2010 are reliable and that the underlying transactions are legal and regular,

                  B.

                  whereas on 10 May 2011 Parliament granted the Executive Director of the European Environment Agency discharge for implementation of the Agency’s budget for the financial year 2009 (6), and in its Resolution accompanying the discharge, inter alia:

                              —

                              encouraged the Agency to continue its efforts to further develop its communication methods in order to attract more media coverage for its findings, as such measures may lead to more transparent working methods and greater public interest in the Agency’s work,

                              —

                              was concerned about the Agency’s practice of making transfers to increase a budget line in order to pay rent for the Agency’s premises for the first quarter of 2010 and charge it to the 2009 budget, as this practice is at odds with the principle of annuality,

                              —

                              called on the Agency to address deficiencies in the recruitment procedures which put at risk the transparency of these procedures,

                  C.

                  whereas the budget of the Agency for the year 2010 was EUR 50 600 000, which is 26 % higher than in 2009; whereas the contribution of the Union to the budget of the Agency for 2010 was EUR 35 258 000, compared with EUR 34 560 000 in 2009 (7), which represents an increase of 2 %,

                  1.

                  Postpones the discharge to the Agency and awaits substantial replies and actions on the critical remarks and requests made;

         Budget and Financial Management

                  2.

                  Notes that the Agency’s levels of budget execution in terms of committed appropriations and of payment appropriations were respectively of 100 % and of 90,75 %;

                  3.

                  Ascertains from the Agency’s Final Accounts that, for the financial year 2010, the total payments of the Agency represented EUR 38 898 533,88;

                  4.

                  Notes that, for five months, from 22 May 2010 to October 2010, the Agency covered its building with a green façade which cost EUR 294 641 and that the contract was realised by the companies Ramboll, as general contractor, and Green Fortune; is surprised that there has been no public tender; demands from the Agency’s Director details on how the companies were chosen as contractors; takes note from the Agency’s Director, in her letter of 11 April 2012, that these costs were covered by the budget lines ‘2140 — Fitting-out of premises’ (EUR 180 872) and ‘3323 — Communications’ (EUR 113 769); underlines that the commitment appropriations under budget line 2140 increased from EUR 85 000 to EUR 271 049 against the opinion of the Agency’s Head of Administration; notes that also in May 2010 the Head of Administration entered into sick leave and since then the position is occupied by an interim Head; notes from the Director’s letter of 30 April 2012 that budget line 2140 has been reinforced by a budget transfer of EUR 180 872 from the budget line ‘2100 — Rent’; recalls that in December 2009 the Agency paid the rent for Q1 2010, thus avoiding reducing the amount to be repaid to the Commission; therefore calls on the Agency to explain the discharge authority why it has extracted EUR 180 872 from the budget line ‘Rent’, while rent is a fixed sum by contract, and to provide information and written evidence on the procedures with regards to the budgetary transfers; expects the Agency to complete all the requested actions by the end of August 2012;

                  5.

                  Notes that in December 2011 the Agency awarded a Framework Service Contract for the provision of media monitoring for 48 months, for a total value of EUR 250 000, which is much higher than the costs of similar services in the previous years; observes that based upon this contract the Agency will spend on average EUR 62 500 per year for media monitoring and believes that these costs are excessive and contrary to the principle of efficient use of the taxpayers’ money;

         Carryover appropriations

                  6.

                  Takes note from the Agency’s Final Accounts that EUR 12 809 551,05 of the 2010 appropriations have been carried forward to 2011; acknowledges that out of the overall amount carried over EUR 8 941 279 are external assigned revenues which are multiannual and hence are not subject of the principle of annuality;

                  7.

                  Notes from the Agency’s Final Accounts that cancellation of unused payment appropriations carried over from the previous year amounted to EUR 585 282,87; understands from the Agency that this amount is lower than the amount cancelled in 2009, i.e. EUR 693 127,02; notes, therefore, that a cancellation rate of only 1,5 % represents an improved anticipation of financial needs;

                  8.

                  Regrets that the Court of Auditors did not consider the level of the Agency’s appropriations carried forward and cancelled to be sufficiently high to warrant a mention in its report on the annual accounts of the Agency for the financial year 2010;

         Procurement Procedures

                  9.

                  Notes the statement from the Agency that the Court of Auditors has carried out in October 2011 an audit on the procurement procedures concerning canteen services, cleaning services, security services and furniture; calls on the Agency to provide the discharge authority with the findings of this audit and its replies and actions undertaken by the end of September 2012;

                  10.

                  Calls on the Internal Audit Service (IAS) to audit the Agency’s contracts in the area of canteen services, cleaning services, security services and furniture to establish whether the call preparation, publication, evaluation and contract management phases respect the two following principles: maximum competition and value-for-money, and to inform the discharge authority in due course of its findings;

         Human Resources

                  11.

                  Notes that the Agency has revised its recruitment processes in line with the remarks made by the discharge authority and Court of Auditors in order to address the weaknesses in relation to vacancy notices, to the documentation of the decision of the selection boards, to the thresholds for being invited to interview and to the minutes of the interviews;

                  12.

                  Acknowledges also from its Annual Management Plan that the Agency implemented the ‘EEA Personnel Policy’ which provides the basis for staff development;

                  13.

                  Was informed that 7 internal candidates and 40 external applicants were recruited in 2010; acknowledges the split amongst categories of internal candidates of 1 official, 5 temporary agents and 1 contract agent and the split amongst externally recruited staff of 1 official, 13 temporary agents, 29 contract agents and 4 national experts; takes note that, for the last five years, the Agency hosted 12 guest scientists working at its premises; for the sake of transparency, calls on the Agency to complete publishing the curriculum vitae — including at least the educational and work background — of the guest scientists, in order to increase transparency;

         Agency’s strategy for 2009-2013

                  14.

                  Welcomes the fact that the Agency staff and management activities, quality control processes, products and services, administrative and building services are brought together under the strategic area in the ‘EEA Strategy 2009-2013’;

                  15.

                  Calls on the Agency to make a more explicit link between measures, resources and results;

         Conflict of interest

                  16.

                  Notes that, from June 2010 until April 2011, the Executive Director of the Agency was a trustee and a member of the International Advisory Board of Earthwatch — an international environmental charity engaging people in scientific field research and education — and was reported to be a member of the European Advisory Board of Worldwatch Europe; acknowledges that, in accordance with the Executive Director’s statement, she stepped down from her positions in Earthwatch in April 2011 following advice from the President of the Court of Auditors in the context of a possible conflict of interests;

                  17.

                  Is seriously concerned that in 2010, while the Executive Director was directly involved with Earthwatch, 29 staff members of the Agency, including the Executive Director, went for up to 10 days of research on different biodiversity projects in the Caribbean or Mediterranean managed by Earthwatch and that the Agency paid a total of EUR 33 791,28, to the NGO as stated by the Agency’s Executive Director;

                  18.

                  Recognises the special training of staff as part of the career development and takes note of the total amount paid for that training;

                  19.

                  Is surprised that Worldwatch Institute Europe founded on 5 November 2010 indicated as its address that of the Agency and used its premises as its own without any rent to the Agency, thus using premises paid by the EU budget; regrets that the Director’s letter of 30 April 2012 refers only to Worldwatch Institute US based and not to the Worldwatch Institute Europe which used the Agency’s premises without any rent; takes further note that executive director of Worldwatch Institute Europe was an Agency’s guest scientist; calls on the Agency to provide the discharge authority with concrete details and documentary evidence on this matter, including the person in the Agency who authorised this, the concrete date when Worldwatch Institute Europe ceased to use the Agency’s premises, as well as whether the work performed by the respective guest scientist of the Agency was published under the Worldwatch Institute Europe name or that of the Agency by the end of August 2012;

                  20.

                  Commends the cooperation between the Agency and NGOs working in the environmental area, as it is the case with other specialised agencies, but recalls that even the mere appearance of conflict of interest is damaging trust in the institutions and raises concerns of taxpayers;

                  21.

                  Calls on the Agency, in an effort to promote greater transparency in terms of preventing and combating conflict of interests, to adopt immediately an action plan to publish on its website the declarations of interest and, when they are not available, the curriculum vitae — including at least the educational and work background — for the management staff, the members of the scientific committee, the experts and the members of the Management Board by 30 June 2012; is of the opinion that such measures would allow the discharge authority and the public to observe their qualifications and to prevent potential conflict of interest;

         Performance

                  22.

                  Notes the Agency’s initiative to provide, on a regular basis, an independent external evaluation on the basis of its founding Regulation (EEC) No 1210/90 and the work programmes adopted by the Management Board; notes in particular that the next evaluation will be undertaken in 2012 and will focus on the efficiency and effectiveness in delivering its corporate strategy;

                  23.

                  Notes the Agency’s initiative to measure its performance through the environmental management and audit scheme (EMAS) and internal management systems using four inter-related perspectives — financial, client, business and learning and growth;

                  24.

                  Acknowledges from comments in the Agency’s Annual Management Plan, the Agency’s efforts with various international and Union bodies, Eionet and the Scientific Committee to establish a networking structure in order to be able to maintain links to the research and scientific community, disseminate and utilise the results, particularly information and data, from research activities at European and national levels, in a more systematic way;

                  25.

                  Notes, in addition, that following the request of the discharge authority for the 2009 discharge, in 2011, the Agency increased its efforts to reach the wider public and initiated pilot projects by using social media as a means of communication directed to the public;

                  26.

                  Calls on the Agency to inform in detail the budget authority, in particular the Budget Control Authority, of:

                              —

                              the sources used by the Agency to construct its reports, papers and other related outputs,

                              —

                              the number of reports, and other products, delivered in 2010,

                              —

                              the evidence of the possible added value brought by the Agency’s reports compared with other bodies’ reports on environmental matters,

                              —

                              the process, if any, of verification of the data sent by the Member States, the periodicity of this verification and the way in which the data sent by Member States is used by the Agency;

                  27.

                  Is pleased that in 2010 the Agency placed extra emphasis on biodiversity, the Global Monitoring for Environment and Security (GMES), the Eye on Earth platform and the State of the Environment report (SOER) 2010;

                  28.

                  Would like to encourage the Agency to continue its efforts to further develop its communication methods in order to attract more media coverage for its findings and thus feed public debate and broaden the scope of the environmental information available to the public on important environmental issues, such as climate change, biodiversity and the management of natural resources;

         Internal audit

                  29.

                  Acknowledges that in 2010 the IAS concluded an audit of the ‘management plan system (MPS)/monitoring of activities’ whose objective was to assess and provide assurance on the adequacy of the planning and monitoring of the Agency’s activities; notes, in particular, that the IAS made eight recommendations, six of which were rated ‘important’ and two ‘desirable’;

                  30.

                  Calls in this respect on the Agency to:

                              —

                              promote guidelines for objectives and measurable indicators in project planning and monitoring of progress,

                              —

                              allocate costs on projects,

                              —

                              promote more effective project management and procedures for checking and verifying new data entered into the MPS;

                  31.

                  Calls, in addition, on the Agency to adopt without further delay measures to address the weaknesses found by the IAS in its previous audits on quality management and on grant management in order to:

                              —

                              develop and use QA/QC checklist for GHG Inventory Report,

                              —

                              plan, describe and document relevant quality checks,

                              —

                              assure supervision of quality controls,

                              —

                              anticipate business continuity issues,

                              —

                              realise on-the-spot controls and verification of grants,

                              —

                              monitor and follow-up grant implementation;

                  32.

                  Draws attention to its recommendations from previous discharge reports, as set out in the Annex to this Resolution;

                  33.

                  Refers, in respect of the other observations accompanying its Decision on discharge, which are of a horizontal nature, to its Resolution of 10 May 2012 (8) on the performance, financial management and control of the agencies.

         (1)  OJ C 366, 15.12.2011, p. 57.

         (2)  OJ L 248, 16.9.2002, p. 1.

         (3)  OJ L 120, 11.5.1990, p. 1.

         (4)  OJ L 126, 21.5.2009, p. 13.

         (5)  OJ L 357, 31.12.2002, p. 72.

         (6)  OJ L 250, 27.9.2011, p. 155.

         (7)  OJ L 64, 12.3.2010, p. 677.

         (8)  Texts adopted, P7_TA(2012)0164 (see page 388 of this Official Journal).

      ANNEX

         EUROPEAN PARLIAMENT RECOMMENDATIONS OVER PAST YEARS

                  European Environment Agency

                  2006

                  2007

                  2008

                  2009

                  Performance

                  n.a.

                  n.a.

                              —

                              Calls on the Agency to set out a diachronic analysis of operations carried out in this and the previous years

                              —

                              Calls on the Agency to continue providing every five years an independent external evaluation on the basis of its founding regulation and the work programmes adopted by the Management Board

                              —

                              Positive trends: the Agency has built up a well-developed activity-based management system, a multiannual work programme, a balanced scorecard with indicators, and a integrated management control system

                              —

                              Calls on the Agency to set out a comparison of the operations that were carried out during the year for which the discharge is to be granted and during the previous financial year

                              —

                              Calls on the Agency to deal with 4 key areas as a matter of priority and to do more to advance their development

                              —

                              Encourages the Agency to continue its efforts to further develop its communication methods in order to attract more media coverage for its findings, such measures may lead to more transparent working methods and greater public interest in the Agency’s work

                              —

                              Requests the Court of Auditors to undertake performance audits of the Agency

                  Budgetary and Financial Management

                  The budgetary principle of annuality was not strictly applied: more than 30 % of the commitments and 50 % for the operational expenditure had to be carried forward

                              —

                              Weaknesses in the tendering procedures: direct award of services without respecting the requirements of the Financial Regulation, award of a specific contract for services not in line with the framework contract terms

                              —

                              Weaknesses in the management of grant agreements (European Topic Centre)

                  n.a.

                              —

                              Encourages the Agency to strengthen the link between the budget and the work programme

                              —

                              Is concerned about the Agency’s practice of making transfers to increase a budget line in order to pay the rent for the Agency’s premises for the first quarter of 2010 and charge it to the 2009 budget, as this practice is at odds with the principle of annuality

                              —

                              Calls on the Agency to improve the accuracy of the information provided by the operational departments on the estimation of accrued operational expenditure

                  Human Resources

                  n.a.

                  Weaknesses in the recruitment procedures: candidates not fulfilling selection criteria were considered for further evaluation and criteria for identifying the best candidates to be invited for interview were not documented

                  n.a.

                              —

                              Calls on the Agency to remedy deficiencies in the recruitment procedures which put at risk the transparency of these procedures

                              —

                              Court of Auditors noted the following weaknesses- vacancy notices did not specify the maximum number of candidates to be put on the reserve lists, questions used during written tests & interviews were not decided on before the examination of the applications, the decisions of the selection boards were insufficiently documented, minutes were not completed & thresholds for being invited to interview or put on the reserve list were not set in advance

                  Internal Audit

                  In breach of the principle of segregation of duties, the same authorising officer by sub-delegation not only performed ex-ante checks but also managed access rights to the IT system for budgetary accounting

                  n.a.

                  Calls on the Agency to fulfil 17 recommendations out of 27 made by the Internal Audit Service: i.e. establishing financial circuits, promoting on-the-spot controls/verifications of grants, and monitoring and following up grant implementation and the implementation of the internal control standards

                  Acknowledges that 3 recommendations from the IAS follow up of past audit recommendations still need to be implemented, these mainly concern sensitive posts, on-the-spot controls/verifications or grants & financial circuits, and are considered very important


title: 2011/563/EU: Decision of the European Parliament of 10 May 2011 on discharge in respect of the implementation of the European Union general budget for the financial year 2009, Section IX — European Data Protection Supervisor#Resolution of the European Parliament of 10 May 2011 with observations forming an integral part of its Decision on discharge in respect of the implementation of the European Union general budget for the financial year 2009, Section IX — European Data Protection Supervisor

text:
               27.9.2011

               EN

               Official Journal of the European Union

               L 250/107

         DECISION OF THE EUROPEAN PARLIAMENT
   of 10 May 2011
   on discharge in respect of the implementation of the European Union general budget for the financial year 2009, Section IX — European Data Protection Supervisor
   (2011/563/EU)
   THE EUROPEAN PARLIAMENT,

               —

               having regard to the European Union general budget for the financial year 2009 (1),

               —

               having regard to the final annual accounts of the European Union for the financial year 2009 (SEC(2010) 963 — C7-0219/2010) (2),

               —

               having regard to the European Data Protection Supervisor’s annual report to the discharge authority on internal audits carried out in 2009,

               —

               having regard to the Annual Report of the Court of Auditors on the implementation of the budget concerning the financial year 2009, together with the institutions’ replies (3),

               —

               having regard to the statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors pursuant to Article 287 of the Treaty on the Functioning of the European Union (4),

               —

               having regard to Article 272(10) and Articles 274, 275 and 276 of the EC Treaty and Article 314(10) and Articles 317, 318 and 319 of the Treaty on the Functioning of the European Union,

               —

               having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (5), and in particular Articles 50, 86, 145, 146 and 147 thereof,

               —

               having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,

               —

               having regard to the report of the Committee on Budgetary Control (A7-0117/2011),

               1.

               Grants the European Data Protection Supervisor discharge in respect of the implementation of its budget for the financial year 2009;

               2.

               Sets out its observations in the resolution below;

               3.

               Instructs its President to forward this Decision and the resolution that forms an integral part of it to the Council, the Commission, the Court of Justice of the European Union, the Court of Auditors, the European Ombudsman and the European Data Protection Supervisor, and to arrange for their publication in the Official Journal of the European Union (L series).

            The President

         Jerzy BUZEK

            The Secretary-General

         Klaus WELLE

      (1)  OJ L 69, 13.3.2009.

      (2)  OJ C 308, 12.11.2010, p. 1.

      (3)  OJ C 303, 9.11.2010, p. 1.

      (4)  OJ C 308, 12.11.2010, p. 129.

      (5)  OJ L 248, 16.9.2002, p. 1.

      RESOLUTION OF THE EUROPEAN PARLIAMENT
      of 10 May 2011
      with observations forming an integral part of its Decision on discharge in respect of the implementation of the European Union general budget for the financial year 2009, Section IX — European Data Protection Supervisor
      THE EUROPEAN PARLIAMENT,

                  —

                  having regard to the European Union general budget for the financial year 2009 (1),

                  —

                  having regard to the final annual accounts of the European Union for the financial year 2009 (SEC(2010) 963 — C7-0219/2010) (2),

                  —

                  having regard to the European Data Protection Supervisor’s annual report to the discharge authority on internal audits carried out in 2009,

                  —

                  having regard to the Annual Report of the Court of Auditors on the implementation of the budget concerning the financial year 2009, together with the institutions’ replies (3),

                  —

                  having regard to the statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors pursuant to Article 287 of the Treaty on the Functioning of the European Union (4),

                  —

                  having regard to Article 272(10) and Articles 274, 275 and 276 of the EC Treaty and Article 314(10) and Articles 317, 318 and 319 of the Treaty on the Functioning of the European Union,

                  —

                  having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (5), and in particular Articles 50, 86, 145, 146 and 147 thereof,

                  —

                  having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,

                  —

                  having regard to the report of the Committee on Budgetary Control (A7-0117/2011),

                  1.

                  Notes that in 2009 the European Data Protection Supervisor (EDPS) had commitment appropriations available amounting to a total of EUR 7 000 000 (2008: EUR 5 300 000 (6), with a utilisation rate of 81,44 %, below the average of the other institutions (97,69 %);

                  2.

                  Notes that in the course of preparation of the annual report concerning the financial year 2009, the Court of Auditors performed an in-depth assessment of supervisory and control systems in the Court of Justice, the European Ombudsman and the EDPS which included the examination of an additional sample of transactions involving payments relating to human resources and to other administrative expenditure;

                  3.

                  Notes that the Court of Auditors found that, in four cases out of ten, the information available to the EDPS was not sufficiently up-to-date to ensure that allowances provided for by the Staff Regulations of Officials of the European Union (7) were paid to staff in compliance with relevant Community regulations and national legislation. The Court of Auditors found that this could entail a risk of incorrect or undue payments;

                  4.

                  Endorses the suggestion of the Court of Auditors that EDPS staff should be requested to submit at appropriate intervals documents proving their personal situation, and that the EDPS should improve its system for the timely monitoring and control of those documents;

                  5.

                  Takes note of the EDPS’s reply to the effect that because of its small size, it is assisted by the Office for the Administration and Payment of Individual Entitlements (PMO) in handling the social allowances files, that the information relating to family and dependent child allowances is updated by the PMO once a year on the basis of specific forms addressed to the staff concerned through the EDPS, and that the social allowances are kept up-to-date on the basis of the information gathered through these forms. Welcomes the EDPS’s intention to improve the monitoring of information relevant to the social allowances in view of the recommendation of the Court of Auditors, and invites the EDPS to report on the action taken in its Annual Activity Report;

                  6.

                  Notes the Court of Auditors’ findings that the EDPS had not put in place a system of ex-post verification, where appropriate, as required by the Financial Regulation, and that the standards of internal control adopted by the EDPS did not provide for exceptions to standard financial procedures to be duly recorded in a central register;

                  7.

                  Notes the EDPS’s reply to the effect that the transactions carried out by the EDPS, including the reimbursement of direct payments processed by other institutions on behalf of the EDPS, are already subject to an ex-ante control; welcomes the EDPS’s intention to examine how to implement an ex-post verification process for the year 2011 onwards in view of the recommendation of the Court of Auditors, and invites the EDPS to report on the action taken in its Annual Activity Report;

                  8.

                  Accepts and understands the EDPS standpoint concerning its small size and the particularity of shared file handling under cooperation and service-level agreements; however, asks the EDPS to clarify what further interinstitutional assistance would be necessary to enable the EDPS to fulfil the recommendation of the Court of Auditors, and to indicate when that could be accomplished; welcomes the EDPS’s decision to implement the observation of the Court of Auditors on internal control standards by creating a central list of recorded exceptions, and invites the EDPS to report on the progress achieved in its Annual Activity Report;

                  9.

                  Notes that the Court of Auditors indicated in its annual report that the audit did not give rise to any further significant observations as regards the EDPS;

                  10.

                  Notes that, due to the limited size of the EDPS, it cooperates administratively with a number of other institutions, in particular with the Commission services (ADMIN, BUDG, EAC, IAS), the Publications Office, Parliament’s services (buildings and infrastructure, security, IT, printshop, communications, etc.), as well as the Council’s translation service; commends the EDPS for the successful consolidation of administrative cooperation;

                  11.

                  Recalls that on the basis of the Administrative Cooperation Agreement between the Secretaries-General of the Commission, Parliament and the Council, signed together with the EDPS on 7 December 2006 for a further period of three years with effect from 16 January 2007, the administrative handling of all EDPS missions is ensured by the Paymaster’s Office of the Commission, and that the evaluation (effectively performed by the Commission’s Internal Auditor, acting as EDPS Internal Audit Service on the basis of the Administrative Cooperation Agreement) had stated that the functionality and efficiency of the internal control system was adequate and that it provided reasonable assurance for the achievement of the EDPS’s objectives;

                  12.

                  Welcomes the annual publication of declarations of financial interests of the elected Members of the institution (EDPS and Assistant Supervisor), containing relevant information on remunerated posts or activities and declarable professional activities;

                  13.

                  Requests that the EDPS include in its next Annual Activity Report (financial year 2010) a chapter providing an account of the follow-up during the year to Parliament’s discharge decisions.

         (1)  OJ L 69, 13.3.2009.

         (2)  OJ C 308, 12.11.2010, p. 1.

         (3)  OJ C 303, 9.11.2010, p. 1.

         (4)  OJ C 308, 12.11.2010, p. 129.

         (5)  OJ L 248, 16.9.2002, p. 1.

         (6)  2006: EUR 4 100 000.

         (7)  OJ L 56, 4.3.1968, p. 1.


title: 2011/564/EU: Decision of the European Parliament of 10 May 2011 on discharge in respect of the implementation of the budget of the 8th, 9th and 10th European Development Funds for the financial year 2009#Resolution of the European Parliament of 10 May 2011 with observations forming an integral part of its Decision on discharge in respect of the implementation of the budget of the 8th, 9th and 10th European Development Funds for the financial year 2009

text:
               27.9.2011

               EN

               Official Journal of the European Union

               L 250/111

         DECISION OF THE EUROPEAN PARLIAMENT
   of 10 May 2011
   on discharge in respect of the implementation of the budget of the 8th, 9th and 10th European Development Funds for the financial year 2009
   (2011/564/EU)
   THE EUROPEAN PARLIAMENT,

               —

               having regard to the Commission’s report on the follow-up to the discharge for the 2008 financial year (COM(2010) 650) and to the Commission staff working documents accompanying that report (SEC(2010) 1437 and SEC(2010) 1438),

               —

               having regard to the financial statements and revenue and expenditure accounts of the 8th, 9th and 10th European Development Funds for the financial year 2009 (COM(2010) 402 — C7-0220/2010),

               —

               having regard to the Commission’s annual report of 29 April 2010 on the Financial Management of the 8th-10th European Development Funds in 2009,

               —

               having regard to the financial information on the European Development Funds (COM(2010) 319),

               —

               having regard to the Court of Auditors’ annual report on the activities funded by the 8th, 9th and 10th European Development Funds (EDFs) concerning the financial year 2009, together with the Commission’s replies (1),

               —

               having regard to the statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors pursuant to Article 287 of the Treaty on the Functioning of the European Union (TFEU) (2),

               —

               having regard to the Special Report No 10/2008 of the Court of Auditors on EC Development Assistance to Health Services in sub-Saharan Africa,

               —

               having regard to the Special Report No 18/2009 of the Court of Auditors on the Effectiveness of EDF support for Regional Economic Integration in East Africa and West Africa,

               —

               having regard to the Council’s recommendations of 15 February 2011 concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Funds for the financial year 2009 (05469/2011 — C7-0050/2011, 05472/2011 — C7-0049/2011, 05473/2011 — C7-0048/2011),

               —

               having regard to the Partnership Agreement between the members of the African, Caribbean and Pacific Group of States, of the one part, and the European Community and its Member States, of the other part, signed in Cotonou on 23 June 2000 (3) and revised in Luxembourg on 25 June 2005 (4),

               —

               having regard to Council Decision 2001/822/EC of 27 November 2001 on the association of the overseas countries and territories with the European Community (‘Overseas Association Decision’) (5), amended by Council Decision 2007/249/EC (6),

               —

               having regard to Article 33 of the Internal Agreement of 20 December 1995, between the representatives of the Governments of the Member States, meeting within the Council, on the financing and administration of Community aid under the Second Financial Protocol to the fourth ACP-EC Convention (7),

               —

               having regard to Article 32 of the Internal Agreement of 18 September 2000, between the Representatives of the Governments of the Member States, meeting within the Council, on the Financing and Administration of Community Aid under the Financial Protocol to the Partnership Agreement between the African, Caribbean and Pacific States and the European Community and its Member States signed in Cotonou (Benin) on 23 June 2000, and the allocation of financial assistance for the Overseas Countries and Territories to which Part Four of the EC Treaty applies (8),

               —

               having regard to its resolution of 5 May 2010 (9) accompanying its decisions on discharge in respect of the implementation of the European Union general budget for the financial year 2008, Section III — Commission and executive agencies, in particular paragraphs 268 to 274 thereof,

               —

               having regard to Article 276 of the EC Treaty and Article 319 TFEU,

               —

               having regard to Article 74 of the Financial Regulation of 16 June 1998 applicable to development finance cooperation under the fourth ACP-EC Convention (10),

               —

               having regard to Article 119 of the Financial Regulation of 27 March 2003 applicable to the 9th European Development Fund (11),

               —

               having regard to Article 142 of Council Regulation (EC) No 215/2008 of 18 February 2008 on the Financial Regulation applicable to the 10th European Development Fund (12),

               —

               having regard to Rules 76 and 77, third indent of, and Annex VI to, its Rules of Procedure,

               —

               having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Development (A7-0140/2011),

               1.

               Grants the Commission discharge in respect of the implementation of the budget of the 8th, 9th and 10th European Development Funds for the financial year 2009;

               2.

               Sets out its observations in the resolution below;

               3.

               Instructs its President to forward this Decision, and the resolution that forms an integral part of it, to the Council, the Commission, the Court of Justice of the European Union, the Court of Auditors and the European Investment Bank and to arrange for their publication in the Official Journal of the European Union (L series).

            The President

         Jerzy BUZEK

            The Secretary-General

         Klaus WELLE

      (1)  OJ C 303, 9.11.2010, p. 243.

      (2)  OJ C 303, 9.11.2010, p. 253.

      (3)  OJ L 317, 15.12.2000, p. 3.

      (4)  OJ L 287, 28.10.2005, p. 4.

      (5)  OJ L 314, 30.11.2001, p. 1 and OJ L 324, 7.12.2001, p. 1.

      (6)  OJ L 109, 26.4.2007, p. 33.

      (7)  OJ L 156, 29.5.1998, p. 108.

      (8)  OJ L 317, 15.12.2000, p. 355.

      (9)  OJ L 252, 25.9.2010, p. 39.

      (10)  OJ L 191, 7.7.1998, p. 53.

      (11)  OJ L 83, 1.4.2003, p. 1.

      (12)  OJ L 78, 19.3.2008, p. 1.

      RESOLUTION OF THE EUROPEAN PARLIAMENT
      of 10 May 2011
      with observations forming an integral part of its Decision on discharge in respect of the implementation of the budget of the 8th, 9th and 10th European Development Funds for the financial year 2009
      THE EUROPEAN PARLIAMENT,

                  —

                  having regard to the Commission’s report on the follow-up to the discharge for the 2008 financial year (COM(2010) 650) and to the Commission staff working documents accompanying that report (SEC(2010) 1437 and SEC(2010) 1438),

                  —

                  having regard to the financial statements and revenue and expenditure accounts of the 8th, 9th and 10th European Development Funds for the financial year 2009 (COM(2010) 402 — C7-0220/2010),

                  —

                  having regard to the Commission’s annual report of 29 April 2010 on the Financial Management of the 8th-10th European Development Funds in 2009,

                  —

                  having regard to the financial information on the European Development Funds (COM(2010) 319),

                  —

                  having regard to the Court of Auditors’ annual report on the activities funded by the 8th, 9th and 10th European Development Funds (EDFs) concerning the financial year 2009, together with the Commission’s replies (1),

                  —

                  having regard to the statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors pursuant to Article 287 of the Treaty on the Functioning of the European Union (TFEU) (2),

                  —

                  having regard to the Special Report No 10/2008 of the Court of Auditors on EC Development Assistance to Health Services in sub-Saharan Africa,

                  —

                  having regard to the Special Report No 18/2009 of the Court of Auditors on the Effectiveness of EDF support for Regional Economic Integration in East Africa and West Africa,

                  —

                  having regard to the Annual Report 2009 of the European Investment Bank on the Investment Facility,

                  —

                  having regard to the Council’s recommendations of 15 February 2011 concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Funds for the financial year 2009 (05469/2011 — C7-0050/2011, 05472/2011 — C7-0049/2011, 05473/2011 — C7-0048/2011),

                  —

                  having regard to the Partnership Agreement between the members of the African, Caribbean and Pacific Group of States, of the one part, and the European Community and its Member States, of the other part, signed in Cotonou on 23 June 2000 (3) and revised in Luxembourg on 25 June 2005 (4),

                  —

                  having regard to Council Decision 2001/822/EC of 27 November 2001 on the association of the overseas countries and territories with the European Community (‘Overseas Association Decision’) (5), amended by Council Decision 2007/249/EC (6),

                  —

                  having regard to Article 33 of the Internal Agreement of 20 December 1995, between the representatives of the Governments of the Member States, meeting within the Council, on the financing and administration of Community aid under the Second Financial Protocol to the fourth ACP-EC Convention (7),

                  —

                  having regard to Article 32 of the Internal Agreement of 18 September 2000, between the Representatives of the Governments of the Member States, meeting within the Council, on the Financing and Administration of Community Aid under the Financial Protocol to the Partnership Agreement between the African, Caribbean and Pacific States and the European Community and its Member States signed in Cotonou (Benin) on 23 June 2000, and the allocation of financial assistance for the Overseas Countries and Territories to which Part Four of the EC Treaty applies (8),

                  —

                  having regard to its resolution of 5 May 2010 (9) accompanying its decisions on discharge in respect of the implementation of the European Union general budget for the financial year 2008, Section III — Commission and executive agencies, in particular paragraphs 268 to 274 thereof,

                  —

                  having regard to Article 276 of the EC Treaty and Article 319 TFEU,

                  —

                  having regard to Article 74 of the Financial Regulation of 16 June 1998 applicable to development finance cooperation under the fourth ACP-EC Convention (10),

                  —

                  having regard to Article 119 of the Financial Regulation of 27 March 2003 applicable to the 9th European Development Fund (11),

                  —

                  having regard to Article 142 of Council Regulation (EC) No 215/2008 of 18 February 2008 on the Financial Regulation applicable to the 10th European Development Fund (12),

                  —

                  having regard to the answers of the Commission and the European Investment Bank (EIB) to the questions of the Committee on Budgetary Control of 25 January 2011,

                  —

                  having regard to Rules 76 and 77, third indent of, and Annex VI to, its Rules of Procedure,

                  —

                  having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Development (A7-0140/2011),

                  A.

                  whereas the European Development Fund (EDF) is the European Union’s most important financial instrument for development cooperation with the African, Caribbean and Pacific States,

                  B.

                  whereas, despite Parliament’s repeated request that the EDF be budgetised, the EDFs do not currently fall under the general budget of the European Union and the general Financial Regulation but are instead implemented in accordance with specific financial rules,

                  C.

                  whereas the total amount of aid channelled through the EDF will increase considerably over the coming years because the amount of Union aid under the 10th EDF for the period 2008 to 2013 has been set at EUR 22 682 000 000 which represents a 64 % increase compared with the financial allocations under the 9th EDF; whereas there is a need for awareness of the looming problem of absorption capacity which requires full knowledge of appropriate expenditure,

                  D.

                  whereas the High Representative of the Union for Foreign Affairs and Security Policy told the European Parliament on 2 February 2011 that the Union’s Neighbourhood Policy had failed; whereas recent events in North Africa have shown that the combination of sharp demographic increases and stagnating economies is liable to create explosive situations; whereas those events illustrate that such demographic increases require successful economies and that policy vehicles are only appropriate when they are effective on the ground and produce positive change,

                  1.

                  Recalls that the EDF (EUR 22 682 000 000 for the current, 10th, EDF for 2008-2013) is not integrated in the Union budget, while being the main instrument for providing Union development aid to the people of the African, Caribbean and Pacific (ACP) countries and the overseas countries and territories (OCTs); notes that the EDF consists of several instruments: grants managed by the Commission, risk capital and loans to the private sector managed by the EIB under the Investment Facility and the FLEX mechanism, aiming at remedying the adverse effects of the instability of export earnings;

         EDF budgetisation

                  2.

                  Reiterates its support for EDF budgetisation, which will strengthen the democratic control, the accountability, and the transparency of funding and will provide more coherence in Union policy concerning ACP countries;

                  3.

                  Recalls once more the statement by the Commission that it wants to propose to incorporate the EDF into the Union budget during discussions on the next financial framework and that it will keep Parliament’s Committee on Budgetary Control fully informed of this initiative; insists, however, that the incorporation of the EDF into the Union budget must not lead to any overall reduction in development spending with respect to the two current funding instruments;

                  4.

                  Urges the Council and the Member States to respond positively to the Commission’s proposal and to agree that the EDF will be fully incorporated in the Union’s budget from 2014 onwards as part of the next financial framework; believes this measure to be long overdue and that the budgetisation of the EDF should take place at the earliest possible date;

         Development priorities

                  5.

                  Recalls the Commission’s commitment (13) to ensuring that a benchmark of 20 % of its allocated assistance under the Development Cooperation Instrument (DCI) is dedicated to basic and secondary education and basic health; calls for reporting against the same benchmark to be provided for the EDFs; calls on the Commission to prioritise support to strengthen health systems by focusing especially on targeting the poorest people, to improve the quality of learning and to help establish a policy framework which favours the poor and which is gender responsive; calls on the Commission to take full account of the recommendations by the Court of Auditors as formulated in its Special Reports No 10/2008 and 12/2010; calls on the Commission to increase this share to 25 % in the future; urges the Commission to place greater emphasis on maternal health and stresses the importance of education and awareness of sexual and reproductive health as an integral part of the women’s health agenda, since this is the Millennium Development Goal in respect of which progress has been most disappointing;

                  6.

                  Welcomes the record levels of commitments reached in 2009; is also satisfied by a number of other improvements in the Commission’s management of the EDF, including the strengthening of the accounting environment (new accrual-based system), better guidance to fragile states for budget support and more effective, efficient and closely monitored external audits; recognises, however, that, first and foremost, fragile States require a better defined strategy and more attention needs to be paid to particular sectors of their economies;

                  7.

                  Underlines once more, that the 10th EDF should focus on a limited number of areas, while involving non-governmental organisations (NGOs) that are effective at local level and that are properly audited, in order to avoid the harmful effects arising from the proliferation of objectives; calls on the Commission to make merit-based use of local- and European-based NGOs, in particular in cases where the management of projects and programmes by NGOs and international organisations (Multi-Donor Trust Funds) is more efficient and cost-effective than management by the Commission and where their activity generates projects that remain sustainable after the financial support has expired; urges the Commission to provide Parliament with clear information on the composition of NGO’s own resources for specific projects which are partly financed by the EDF and by the NGOs themselves;

                  8.

                  Highlights that development aid mechanisms should be also aimed at promoting wealth creation and supporting small and medium-sized enterprises, since wealth creation remains a crucial tool in alleviating poverty; recalls that an estimated EUR 800 000 000 000 is lost annually from developing countries through illicit capital flows, prevention of which could prove decisive in alleviating poverty and achieving the Millennium Development Goals;

         Financial management of the EDFs

                  9.

                  Notes that, in the Court of Auditors’ opinion, the Commission’s report on the Financial Management of the 8th-10th EDFs in 2009 ‘presents an accurate description of the achievement of the Commission’s operational objectives for the financial year (particularly concerning financial implementation and control activities)’, despite the negative impact of the economic crisis which has hit a large number of developing countries;

                  10.

                  Underlines, however, that the Commission’s follow-up of observations made by the Court of Auditors in a number of cases is inadequate (for example, the management of implementing organisations should be better supported, ex-ante checks should be improved by focusing more on keys risks and ‘the functionalities of CRIS audit’ should be developed to enable a more efficient and effective monitoring of audit); stresses that the Commission’s action on the Court of Auditors’ recommendations is an important element of accountability for the discharge authority; calls, therefore, on the Commission to inform Parliament’s competent committees on the actions it has taken or plans to take to eliminate the shortcomings as mentioned by the Court of Auditors;

                  11.

                  Is concerned at certain weaknesses identified by the Court of Auditors, in particular regarding public procurement procedures (14), ex-ante controls in Delegations (15) and partner countries’ internal control systems (16), and urges the Commission to pursue energetically and to broaden existing training programmes for staff working in Delegations and in the offices of national authorising officers;

                  12.

                  Notes that the statement of assurance of the Court of Auditors does not cover the 9th and 10th EDF resources, which are managed by the EIB and for which the EIB is responsible (17); finds it to be undesirable politically and for reasons of accountability that the Investment Facility is not covered by the Court of Auditors’ statement of assurance or by Parliament’s discharge procedure and agrees with the Court of Auditors that these provisions reduce the scope of Parliament’s powers of discharge, especially considering that EDF resources are derived from public money contributed by European taxpayers and not by the financial markets;

                  13.

                  Welcomes the opinion of the Court of Auditors that the final annual accounts of the 8th, 9th and 10th EDFs present fairly, in all material respects, the financial position of the EDFs as of 31 December 2009; notes, however, that the Court of Auditors draws attention to an understatement of the amount of guarantees received in respect of pre-financing and to an overstatement of the amount of retention guarantees disclosed in the notes to the financial statements; calls on the Commission to remedy these shortcomings without delay;

                  14.

                  Notes that, at the end of 2009, the financial statements regarding the on-going amount of guarantees received in respect of prefinancing included an amount of EUR 413 600 000 and that this amount was understated by EUR 82 300 000, or 19,9 %; notes also the fact that the amount of the retention guarantees in respect of the financial statements was EUR 186 200 000 and that this amount was overstated by EUR 58 400 000, or 31,4 %; calls on the Commission to explain on a case-by-case basis the reasons for these under-and overstatements;

         The accounting system of the EDFs

                  15.

                  Welcomes the introduction of the new accrual-based accounting system (ABAC-EDF) in February 2009 and underlines the fact that the 2009 annual accounts of the EDFs are the first set of accounts which have been prepared using ABAC-EDF; notes that the new accounting system reduces the number of manual adjustments needed and that it strengthens the accounting environment;

                  16.

                  Notes that EuropeAid’s ex-post controls identified an increased frequency of encoding errors (contract type, contract start and end dates); but recalls that, at the end of 2009, EuropeAid’s central services set up a department to monitor the quality of information encoded in CRIS, which should further improve the reliability of the data used to prepare the annual accounts; wishes to be kept informed of progress made in this respect;

         Regularity of transactions

                  17.

                  Welcomes the fact that the Court of Auditors considers that the revenue, commitments and payments underlying the accounts of the 8th, 9th and 10th European Development Funds for the year ended 31 December 2009 are in all material respects legal and regular (statement of assurance, paragraph VIII); regrets, however, that the Court of Auditors had to draw special attention to the high frequency of non-quantifiable errors affecting commitments and payments but not included in the estimation of total error; recalls, even if the supervisory and control systems of EuropeAid have significantly improved year after year, that, overall, the Court of Auditors assessed EuropeAid’s supervisory and control systems as only partially effective; expects, consequently, from the Commission, a constant follow-up and requests a report on the measures taken to remedy the abovementioned problems;

                  18.

                  Notes that the errors that were detected concerned compliance with tendering rules, legal deadlines for the signature of contracts and provisions regarding mandatory guarantees; notes that, as regards budget support commitments, the Court of Auditors found that, in the context of the Commission’s dynamic interpretation of the Cotonou Agreement (18), EuropeAid acted in compliance with that agreement’s requirements; takes note of the fact that, according to the Commission, no payment was made without being covered by financial guarantees;

                  19.

                  Notes that the main types of quantifiable errors detected on project payments were the following: (a) accuracy: calculation errors; (b) occurrence: absence of invoices or other supporting documents for services rendered or goods supplied; (c) eligibility: expenditure incurred outside the implementation period or related to items not foreseen in the contract, undue payment of VAT or non-application of mandatory penalties; notes that the non-quantifiable errors mainly concerned non-compliance with applicable rules on bank guarantees and incorrect calculations of the reimbursement of advances from contractors; notes, however, the remark of the Commission which pointed out that all the errors in calculating the reimbursement of advances were rectified before the end of the contract; despite this, calls on the Commission to enhance ex-ante controls to prevent this type of error and possible losses as a result of non-compliance with the bank guarantee rules;

         Monitoring of implementing organisations

                  20.

                  Welcomes the efforts of EuropeAid and of the Delegations in addressing the various weaknesses which still exist in the financial procedures and controls of implementing organisations, supervisors and National Authorising Officers (NAOs); invites EuropeAid to strengthen its efforts in these areas in future; recalls also the recommendations of the Court of Auditors that EuropeAid should continue its efforts to ensure that the Delegations record data in the CRIS Audit in a comprehensive and timely manner (19);

                  21.

                  Is deeply concerned at the Court of Auditors’ finding that the monitoring and supervision by Delegations is only partially effective; deplores the lack of capacity of most NAOs in beneficiary countries, which results in poorly documented and ineffective checks, as well as the shortcomings in the financial procedures and controls instituted by implementing organisations and supervisors; shares the Court of Auditors’ view that Delegations are subject to resource constraints which often limit their capacity to perform certain activities; calls on the Commission to address this problem without delay;

         Special Report No 18/2009 of the Court of Auditors

                  22.

                  Welcomes the Special Report No 18/2009 of the Court of Auditors on the Effectiveness of EDF support for Regional Economic Integration in East Africa and West Africa and the thorough analysis carried out by the Court of Auditors, and deplores the unsatisfactory situation revealed therein; stresses nevertheless its concern at the lack of complementarity between the Commission’s regional and national cooperation strategies and emphasises that bringing regional and national strategies in line with one another is essential to increase the effectiveness of the aid provided;

                  23.

                  Is deeply concerned about the insufficient absorption capacity of regional organisations; urges the Commission, during the mid-term review of the regional strategies foreseen for the first half of 2011, to take account of the regional cooperation situation and to pay special attention to the possibility of revising the amounts allocated;

                  24.

                  Finds it nevertheless unacceptable that the Court of Auditors, through a lack of proper reporting, was ‘unable to assess’ a number of projects financed;

                  25.

                  Takes the view that the Union should be represented in each Regional Organisation by a specifically assigned Head of Delegation and that Union Delegations should be mandated to discuss the aligning of membership in different regional groupings;

                  26.

                  Underlines that, in its Special Report No 18/2009, the Court of Auditors assessed EDF support for regional economic integration in East Africa and West Africa, to which a considerable proportion — over 50 % — of EDF funding was allocated, as only partially effective; asks the Commission to inform Parliament about the measures being taken following the requests formulated by Parliament in its resolution of 5 May 2010 (20) accompanying its Decision on discharge to the 7th, 8th, 9th and 10th EDFs, before the start of the discharge procedure 2010; would also welcome a complete overview showing which of these measures have been implemented effectively in the regions concerned;

                  27.

                  Acknowledges that regional economic integration can create growth and jobs in developing countries and thereby contribute to reducing poverty; welcomes, accordingly, the fact that EDF funding in this area has more than doubled over the financial period in question;

                  28.

                  Regrets that EDF support for regional integration has not yet been wholly effective, mainly owing to lack of capacity on the part of the African authorities, the overlapping membership of African regional economic organisations leading to the duplication of efforts and dispersion of resources, and inadequate support and coordination from Commission Delegations, principally due to lack of resources;

                  29.

                  Calls, accordingly, on the Commission to step up capacity-building for East African and West African regional economic organisations and their institutions, including support for national parliaments and local civil society, and to encourage convergence between regional blocs with a view to eliminating overlapping membership over time, whilst taking care to respect partner countries’ ownership of the process;

                  30.

                  Calls on the Commission and the European External Action Service to allocate more resources in order to enable Union Delegations to manage regional integration processes more effectively, and to ensure greater coordination and more coherence between regional and national programmes;

                  31.

                  Insists that the Union should not pressure African states to sign up to Economic Partnership Agreements (EPAs) any faster or which cover a greater range of issues than they want to, and that the Union should avoid undermining existing regional groupings by agreeing EPAs with individual countries;

                  32.

                  Insists that smaller states’ fund allocation, especially for the least-developed countries, should be more focused on sustainable economic development, such as through wealth creation mechanisms, so as to reduce the dependency on regional economic ‘giants’, such as Nigeria in West Africa; calls on the Commission to continue its funding for regional programmes, otherwise known as Intra-ACP Programmes, which cover several or all countries in a particular region;

         Use of accrued interest

                  33.

                  Does not agree with the use of accrued interest on EDF treasury accounts (including transfers from the period 2001-2007), which is estimated at EUR 34 000 000, to cover staff expenditure but considers that it should only be used for expenditure for projects and programmes; asks the Commission to explain what the policy in the past was and, if necessary, to make proposals to amend the regulation in force in line with this principle without delay;

         Budget support

                  34.

                  Recalls that Parliament’s assessment of budget support should not focus on the risks only but also on the benefits, as well as on the risks and benefits of alternative aid delivery; asks the Commission to provide information concerning those cases in which the goals set for EU budget support were accomplished and concerning recipient countries in which specific problems were encountered;

                  35.

                  Is aware that budget support is a controversial development tool offering the advantage of low transaction costs, increased ownership and enhanced dialogue between partners and donors, while at the same time, involving the risk of misappropriation and unwanted use of funds when public finance management by recipient countries does not prove sufficiently transparent, accountable and effective; stresses that budget support is not the right answer to every situation and should not be perceived to be the sole option;

                  36.

                  Recalls that, in accordance with Article 25(1)(b) of Regulation (EC) No 1905/2006 of the European Parliament and of the Council (21), budget support may be granted if the partner country’s management of public spending is sufficiently transparent, reliable and effective; in that context, expresses its concern at the risks of inefficient and ineffective public spending that are entailed by the Commission’s ‘dynamic’ interpretation of the eligibility criteria; calls on the Commission to continue its efforts to substantiate its decisions concerning the eligibility of budget support and to ensure that all financing agreements provide a comprehensive and clear basis for the assessment of compliance with payment conditions;

                  37.

                  Regrets the high level of errors in budget support payments (35 %); reiterates its call for more transparent and objective eligibility criteria for budget support, and supports the Court of Auditors’ recommendation for the Commission to ‘clearly specify the indicators, targets, calculation methods and verification sources’ (22); calls on the Commission to intensify audits and supervisory and control systems and to monitor and report back on the extent to which these criteria are being met, in line with the provisions of Article 25(1)(b) Regulation (EC) No 1905/2006;

                  38.

                  Welcomes the publication of the green paper on the future of EU budget support to third countries (COM(2010) 586) but deplores the fact that, despite previous calls by Parliament, the Commission has failed to draw up an annual report on the use of budget support, including useful, comprehensive, reliable, analytical and evaluative information on planned and disbursed budget support, achievement of expected results as set out by donor objectives and country strategies, existence and quality of complementary conditions, the effectiveness of the dialogue, the state of donor harmonisation, the complementary capacity building which has taken place and the effect of that capacity building, achievement of improved country systems, accountability institutions, public finance management institutions, monitoring and evaluation institutions, the amount and rate of irregular expenditure, and an analysis of the typology of irregularities (systemic and non-systemic) brought to light by controls and audits and remedial action taken;

                  39.

                  Recalls that Parliament’s role as regards budget support is to hold the Commission accountable for the results of spending, and that budget support is an aid instrument which requires a paradigm shift in oversight behaviour, moving from mere control over inputs to the checking of results against indicators, thus ensuring that support spending benefits the population of the recipient country;

                  40.

                  Considers, within the scope of the revision of the guidelines on budgetary support by the Commission, that particular attention must be given to supervisory and control systems; expects the Commission to strengthen the monitoring and annual reporting on the compliance with the eligibility criteria; recalls that capacity building projects within the scope of budgetary support operations are subject to the same supervisory and control system as any other project, which includes audits;

                  41.

                  Recalls that under the 10th EDF, as compared with the 8th and 9th EDFs, there was a significant increase in the share of cumulative financing decisions accounted for by budget support and structural adjustment; expresses its concern about this development;

                  42.

                  Recalls that the Court of Auditors found in its Annual Report on the EDFs, concerning the financial year 2009 that budget support payments were affected by a high frequency of non-quantifiable errors and that ‘[t]he main explanation was that the Delegations’ public finance management assessment reports did not explain the criteria against which progress had to be assessed […], the progress made and the reasons why the reform programme may not have been implemented according to the recipient Government’s plan’ (23); urges the Commission to evaluate the budget support payments with even greater rigour and to tighten up its payment procedures from now on;

                  43.

                  Calls on the Commission to ensure that the specific conditions for performance-based variable tranches clearly specify the indicators, targets, calculation methods and verification sources and that Delegations’ reports provide a structured and formalised demonstration of public finance management progress by clearly setting the criteria against which progress was to be assessed, the progress made and the reasons why the reform programme may have not been implemented according to plan;

                  44.

                  Calls on the Commission to take all necessary measures in order to combat corruption in the beneficiary states, through maintaining a close dialogue with partner governments on corruption issues and, by taking a pro-active approach, to ensure that the appropriate systems are in place and that sanctions are available when necessary; believes that the provision of funds should be reconsidered if such cooperation is not forthcoming and if no guarantee as to the basic effectiveness of the systems to tackle corruption can be obtained;

                  45.

                  Reiterates its opinion that the involvement of national parliaments, civil society and local authorities in partner countries is indispensable in order to achieve genuine ownership of the process and repeats its call on the Commission to make every effort in order to improve dialogue with these bodies at all the different stages of the programming process;

                  46.

                  Urges the Commission to help partner countries develop parliamentary control and audit capacities and to involve national parliaments, as well as local civil society partners, in drawing up their national development strategies;

                  47.

                  Invites its relevant committees to establish direct contacts with their sister committees in the parliaments of the recipient ACP countries in order to encourage and support their role in ensuring the effectiveness of aid through parliamentary oversight activities;

                  48.

                  Urges the Commission to ensure better visibility for Union-funded activities overseas;

         Disclosure statement by beneficiary countries

                  49.

                  Recalls once more its view that development aid in general and budget support in particular should be tied to an ex-ante disclosure statement, issued by the recipient country’s government and signed by its finance minister, concerning selected issues that affect the governance and accountability structure of a beneficiary country;

         Human resources

                  50.

                  Is extremely concerned that vacancy rates in third-country Delegations are considered as a ‘critical risk’ (24) and that resource constraints, staff shortages and high staff turnover significantly hamper the Commission’s effective implementation of EDF funds, in particular as regards project management, training, monitoring, and reliable and timely audits; consequently expects the European External Action Service to make it a priority to equip all Delegations with adequate levels of qualified staff, notably experts in the field of development;

         EuropeAid

                  51.

                  Regrets that, although the ex-ante controls by authorising officers in EuropeAid’s central services were assessed by the Court of Auditors as effective, it concluded that EuropeAid’s supervisory and control systems were only partially effective in ensuring that payments are regular;

                  52.

                  Reminds the Commission that:

                              —

                              EuropeAid should, in the context of its planned review of its overall control strategy, develop a key indicator of the estimated financial impact of the uncorrected errors after all controls have been implemented,

                              —

                              EuropeAid should, in the context of this review, assess the cost-effectiveness of the various controls, notably of the transactional ex-post control system, and examine the relevance and feasibility of an annual audit of a representative statistical sample of closed projects,

                              —

                              regarding budget support, EuropeAid should ensure that the specific conditions for payments are clearly defined and that Delegations’ reports provide a structured and formalised demonstration of progress achieved in public finance management;

         The Investment Facility

                  53.

                  Very much welcomes the fact that, during the discharge procedure for the financial year 2009, the EIB presented, for the first time, its annual report on the implementation of the Investment Facility to Parliament’s Committee on Budgetary Control and gave extensive replies to the written and oral questions from its members; requests the EIB to conclude a framework agreement with Parliament’s committee responsible for the discharge procedure for the coming years, including the information to be provided by the EIB;

                  54.

                  Expects the EIB to confirm that there is no overlap between projects it finances and those financed by the Commission and considers substantial improvements in coordination between the Commission and the EIB to be indispensable, as the EIB Director-General for Operations outside the European Union told the Committee on Budgetary Control on 25 January 2011; asks itself whether EIB staff should be posted to Union Delegations; expects to receive, by the end of September 2011, a combined report from both institutions on the reinforcement of their cooperation and the agreed procedures including an analysis of the possible need to post EIB staff in the Delegations;

                  55.

                  Calls on the EIB to carry out thorough due diligence, verifying the presence of appropriate local public consultation, on development-related aspects of projects covered by the EU guarantee, prior to project approval, including the performance of financial intermediaries in using the loan granted by the EIB on these aspects; is of the opinion that, when it comes to lending in developing countries, the EIB should apply stringent enhanced due diligence in accordance with standardised procedures, following international best practices, concerning the fight against money laundering and the financing of terrorism;

                  56.

                  Calls once more on the EIB to focus its reporting on results and to present complete, relevant and objective information as regards outcomes, objectives set, objectives achieved and reasons for possible deviation, as well as evaluations carried out and a summary of evaluation results;

                  57.

                  Welcomes that the EIB now seems to be more committed to focusing on reporting on results, and that in the 2010 Annual Report on the Investment Facility which is currently being finalised, there will be more focus on results, compared to 2009; considers it a positive step forward that the EIB is currently working on development result indicators which should be ready for implementation towards the second half of 2011;

                  58.

                  Expects the next annual report of the EIB to be less theoretical and more practical, in particular on the results obtained by the various programs and actions financed by the Investment Facility;

                  59.

                  Calls on the EIB to forward to it additional information on the blacklist of fraudsters, whilst preserving the customary confidentiality of open cases; welcomes the EIB’s stated aim of setting up an anti-fraud unit and expects to receive regular updates on progress made in establishing it;

                  60.

                  Is surprised at the EIB’s statement in which it found that no fraudulent practice exists in the context of EIB Investment Facility programmes;

                  61.

                  Considers it indispensable to conduct an overall audit of all projects in developing countries financed by the EIB, which should not be restricted to major projects but should also review all appropriations and guarantees the EIB must write off;

                  62.

                  Invites the Commission to monitor and control closely the implementation of the Investment Facility with a view to guaranteeing that it fulfils its objective as a development tool, and to inform Parliament’s Committee on Budgetary Control on a regular basis of its findings.

         (1)  OJ C 303, 9.11.2010, p. 243.

         (2)  OJ C 303, 9.11.2010, p. 253.

         (3)  OJ L 317, 15.12.2000, p. 3.

         (4)  OJ L 287, 28.10.2005, p. 4.

         (5)  OJ L 314, 30.11.2001, p. 1 and OJ L 324, 7.12.2001, p. 1.

         (6)  OJ L 109, 26.4.2007, p. 33.

         (7)  OJ L 156, 29.5.1998, p. 108.

         (8)  OJ L 317, 15.12.2000, p. 355.

         (9)  OJ L 252, 25.9.2010, p. 39.

         (10)  OJ L 191, 7.7.1998, p. 53.

         (11)  OJ L 83, 1.4.2003, p. 1.

         (12)  OJ L 78, 19.3.2008, p. 1.

         (13)  Commission Declaration concerning Article 5 DCI, Annex to the Communication from the Commission to the European Parliament of 24 October 2006 (COM(2006) 628).

         (14)  Paragraph IX, Court of Auditors’ Annual Report 2009 on the EDFs.

         (15)  Point 30, Court of Auditors’ Annual Report 2009 on the EDFs.

         (16)  Point 5, Court of Auditors’ Annual Report 2009 on the EDFs.

         (17)  Point 3, Court of Auditors’ Annual Report 2009 on the EDFs.

         (18)  Points 28 and 29 of Special Report No 2/2005 of the Court of Auditors concerning EDF budget aid to ACP countries (OJ C 249, 7.10.2005, p. 1).

         (19)  Point 54, Court of Auditors’ Annual Report 2009 on the EDFs.

         (20)  OJ L 252, 25.9.2010, p. 109.

         (21)  Regulation (EC) No 1905/2006 of the European Parliament and of the Council of 18 December 2006 establishing a financing instrument for development cooperation (OJ L 378, 27.12.2006, p. 41).

         (22)  Point 55, Court of Auditors’ Annual Report 2009 on the EDFs.

         (23)  Point 25, Court of Auditors’ Annual Report 2009 on the EDFs.

         (24)  Point 40, Court of Auditors’ Annual Report 2009 on the EDFs.