# EUR-Lex - 52004BP0048 - EN

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# 52004BP0048

**Resolution of the European Parliament containing the comments accompanying the decision concerning the discharge in respect of the implementation of the general budget of the European Union for the 2001 financial year — Section VII — Committee of the Regions **

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Official Journal L 057 , 25/02/2004 P. 0008 - 0012 Official Journal 064 E , 12/03/2004 P. 0229 - 0229 *

Resolution

of the European Parliament containing the comments accompanying the decision concerning the discharge in respect of the implementation of the general budget of the European Union for the 2001 financial year - Section VII - Committee of the Regions

THE EUROPEAN PARLIAMENT,

having regard to the revenue and expenditure account and balance sheet in respect of the financial year 2001 (SEC(2002) 405 - C5-0247/2002),

having regard to the annual report of the European Court of Auditors for the financial year 2001, together with the institutions' replies (C5-0538/2002)(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 European Court of Auditors pursuant to Article 248 of the EC Treaty (C5-0538/2002),

having regard to the Council's recommendation of 7 March 2003 (C5-0087/2003),

having regard to Articles 272(10) and 275 of the EC Treaty,

having regard to Article 22(2) and (3) of the Financial Regulation of 21 December 1977(2) and Article 50 of the Financial Regulation of 25 June 2002(3),

having regard to the observations of the Financial Controller of the Committee of the Regions (COR) in his note to the Committee of the Regions' Secretary-General of 25 September 2001,

having regard to the letter from the Committee of the Regions' Director of Administration to the Chairman of the Committee on Budgetary Control of 27 February 2003,

having regard to the letter from the Court of Auditors received on 11 July 2003 by the Committee of the Regions in response to its request for an audit of the 2001 accounts and the interim case report by OLAF dated 28 July 2003,

having regard to Rule 93a and Annex V of its Rules of Procedure,

having regard to its decision and resolution of 8 April 2003(4) postponing discharge,

having regard to the report of the Committee on Budgetary Control (A5-0486/2003),

1. Recalls that by its decision of 8 April 2003 it postponed discharge with respect to the 2001 accounts of the Committee of the Regions for the following reasons:

- the contradictions and differences of interpretation between the documents produced by the Financial Controller and the Director of Administration which had been received in the context of the discharge procedure and confirmed in the meeting of its Committee on Budgetary Control of 19 March 2003;

- the specific request already made by the Financial Controller for external assistance in addressing the outstanding problems of financial management;

- concerns raised by the Financial Controller regarding reimbursements for participation at external meetings, travel reimbursements and daily allowances;

2. Reiterates that in its abovementioned resolution of 8 April 2003 it called on the Committee of the Regions immediately to commission a detailed, full and independent audit, to be carried out by a recognised external institution - preferably the European Court of Auditors - on the Committee's overall budget implementation, as well as the financial and administrative management, taking the view that the audit should examine, inter alia, the areas listed above and attest to the sound financial management of the institution, and should be delivered to the discharge authority as soon as possible in order for it to be able to consider the final discharge decision for 2001;

3. Notes that in response to that resolution and at the request of the Committee of the Regions, the Court of Auditors undertook (in a letter dated 14 May 2003) "to widen the scope of the current audit relating to the statement of assurance for 2002. The audit will thus include an analysis of the control procedures in place and an examination of the legality and regularity of a sample of underlying transactions. In particular, we will examine a sample of transactions underlying the 2001 accounts for budget line 1004 - Travel and subsistence allowance for formal and other meetings"; recalls that the Court undertook in a meeting of Parliament's committee responsible to communicate its conclusions in good time to allow the committee to draft and submit a second report to Parliament during autumn 2003;

4. Notes the Court's conclusion communicated in a letter(5) signed by its President as follows:

"It was noted that checks were tightened in 2002, following a report of the Financial Controller in September 2001 and the nomination of a new imprest account holder in January 2002.

The findings of the Court's reviews and examinations of the Committee's 2001 accounts do not show any substantial infringement of the budgetary or financial rules applicable to expenditure made by the Committee of the Regions in 2001. The findings are in line with the Court's statement of assurance included in its annual report for the financial year 2001"

5. Points out that the conclusions of the Court of Auditors appear to contradict its own findings, contained in the 2002 sector letter addressed to the Committee of the Regions and made available to the European Parliament's Committee on Budgetary Control, which show that in a sample of 30 transactions, eight errors were detected;

6. Notes that the letter from the Court of Auditors did not represent the "detailed, full and independent audit" it had requested from the Committee of the Regions; regrets that the audit carried out by the Court of Auditors did not detect the shortcomings existing in the implementation of procedures for concluding contracts and tenders by the Committee of the Regions, which make up a large part of the European Anti-Fraud Office (OLAF) report; notes however, that the shortcomings referred to are mentioned in the 2002 annual report;

7. Criticises the Court of Auditors, which, in contrast to OLAF, failed to detect any irregularities in the Committee of the Regions; expects the Court of Auditors to issue a statement, by the end of February 2004, providing a detailed explanation of the reasons which led to these differing results;

8. Notes the following remarks based on some of OLAF's conclusions:

(a) procurement procedures

- there is no concrete evidence of elements suggesting personal gain or harmful intent on the part of the staff of the Committee of the Regions, nor any financial loss to the Committee of the Regions;

- however, there is evidence of systematic incompetence and disregard for the essential rules of tendering procedures and financial management, including elements of fraud and fake offers;

- an endemic culture of unprofessionalism and improvisation was revealed;

- the Committee of the Regions should in future provide its staff with training in financial and tendering procedures;

- the Committee of the Regions should involve its legal service in administrative procedures;

- its President should consider opening disciplinary proceedings in relation to the officials concerned;

(b) payment of allowances to Members of the Committee of the Regions

- several Members submitted false or incomplete expenses claims and/or supporting documents, in contravention of Article 196 of the Belgian Penal Code as well as Belgian Royal Decision of 31 May 1933 on declarations concerning allowances and subventions;

- the administration of the Committee of the Regions should adopt detailed rules in relation to presence lists and allowances;

- the Committee of the Regions' rules on whistle-blowers should be brought into line with the model agreed between Parliament, Council and Commission;

- payments to certain Members should be re-evaluated and, where appropriate, recoveries made;

- the Committee of the Regions should consider whether to institute disciplinary proceedings in respect of the failure by officials working for the Committee, to inform OLAF of facts of which they were aware, which were liable to constitute an irregularity detrimental to the Community's financial interests;

(c) role of the Financial Controller

- there was disrespect for the institutional role of the Financial Controller, the Advisory Committee on Procurements and Contracts and the overruling power of the President;

- the efforts of the administration were focused on discouraging or destabilising the bringer of the bad news, in this case the Financial Controller, rather than on changing things for the benefit of the Committee of the Regions;

9. Recalls Article 10 of Regulation (EC) No 1073/1999 of the European Parliament and of the Council(6) in respect of OLAF, under which the Director of OLAF is explicitly required to forward to the judicial authorities information concerning matters liable to result in criminal proceedings; stresses that the Regulation does not provide the Director with any discretionary powers and that it is for the competent judicial authorities alone to decide whether or not criminal proceedings will be instituted;

10. Notes the following comments of the Committee of the Regions annexed to a letter from the Committee's President, dated 29 October 2003:

(a) it does not seem necessary to refer the case to judicial authorities with regard to the conduct of any present or former Member or personnel of the Committee of the Regions;

(b) in relation to Members' allowances:

- the outstanding amount of EUR 9552,12 from Member "A"(7) will be recovered, as far as is legally and administratively possible, from his heirs;

- the contested amount of EUR 261,50 for a daily allowance of Member "B" in 2000 has already been paid back to the Committee of the Regions;

- the case in relation to Member "C" has been re-evaluated in detail and the analysis shows a balance amount of EUR 1140,23 in favour of the Member;

- the relevant rules and the application forms for Members' allowances would be re-assessed;

(c) in relation to tendering procedures:

- there was no financial loss to the Committee of the Regions;

- the Committee of the Regions had decided not to renew the contract for printing newsletters with the firm in question;

(d) in relation to general management:

- the Committee of the Regions had adopted a new staff policy in April 2003;

- at its meeting of 8 October 2003 the Committee of the Regions' Bureau had agreed to draw up a work plan to improve the administration and management of the Committee of the Regions, involving three working parties which would submit a reform proposal to the Bureau for a decision in February 2004;

- the Committee of the Regions had accepted the request by the former Secretary-General, whose appointment was annulled by the Court of First Instance on 18 September 2003 (Case T-73/01) on procedural grounds, to be granted unpaid personal leave from his current position as an A 2 grade Committee of the Regions official with effect from 1 February 2004 onwards, and to be granted early retirement with effect from 1 September 2004;

11. Notes the statement made by the President of the Committee of the Regions before the committee responsible on 4 November 2003, in which he acknowledged that there had been an "endemic culture of cronyism in the Committee of the Regions in 2001", and in which he announced his intention to submit an overall proposal for the administrative reform of the Committee of the Regions to its Bureau in February 2004; considers that this proposal should be drawn up with the active help of an independent outside expert, such as a former Member of the Court of Auditors, and welcomes the acting Secretary-General's undertaking to this effect; calls on the Committee of the Regions to forward the text of the proposal to the European Parliament as soon as possible; considers that such a proposal must include guarantees as to the ability of the internal auditor to carry out his duties in a professional and independent manner;

12. Calls on the President of the Committee of the Regions to include an action plan for the complete overhaul of the institution, similar to that introduced by the Commission in March 2000, containing specific measures, targets and deadlines that will enable progress to be measured;

13. Supports criticisms and recommendations regarding the opening of disciplinary proceedings against a number of Committee of the Regions officials, including two named officials, and welcomes the acting Secretary-General's commitment to that effect;

14. Supports the work of the internal auditor; condemns, without prejudice to the outcome of the proceedings initiated by the internal auditor pursuant to Article 24 of the Staff Regulations, the official obstruction to which the Financial Controller/internal auditor and his staff have been subjected by the administration of the Committee of the Regions in the course of the exercise of their duties under the Financial Regulation; praises the internal auditor and his staff for their serious and repeated (but ultimately unsuccessful) attempts at convincing the administration and the Bureau of the Committee of the Regions of the need to take remedial action; recognises that in the absence of the protection normally afforded to officials who report wrongdoing, the internal auditor was right to take his concerns directly to the European Parliament and should not suffer any adverse consequences as a result;

15. Notes that the rules relating to the payment of allowances to Members of the Committee of the Regions were revised on 19 November 2002 and that they now stipulate that tickets and boarding cards must be produced before any reimbursement is paid;

16. Demands a declaration by the Committee of the Regions that everything possible will be done to ensure that all its Members cooperate sincerely in order to guarantee consistent and correct application of the rules on the payment of allowances to its Members;

17. Insists that all possible steps should be taken to recover all the sums unduly paid to Members and former Members of the Committee of the Regions; considers however that under no circumstances can claims from Members be backdated;

18. Notes the judgment handed down by the Court of First Instance on 18 September 2003 annulling the appointment of the Secretary-General of the Committee of the Regions (Case T-73/01);

19. Calls on the Committee of the Regions to take a decision on whether or not disciplinary proceedings should be instituted to determine whether officials of the Committee are to be held responsible, and to inform Parliament of its decision;

20. Asks that the Committee of the Regions refuse the request by the former Secretary-General, whose appointment was annulled by the Court of First Instance on 18 September 2003 on procedural grounds, to be granted unpaid personal leave from his current position as an A 2 grade Committee of the Regions official, and to be granted early retirement with effect from 1 September 2004;

21. Calls on the Committee of the Regions to provide a full report on the current discharge decision in good time for it to be taken into account in the context of the discharge procedure for the 2002 financial year; considers that the President must assume personal responsibility for implementation of the reforms and expects to be regularly informed of progress; determines to re-evaluate the commitment to the reform process in its next discharge decision for 2002;

22. Insists that the President, as he has undertaken to do, ensure respect throughout the institution for the office and person of the internal auditor, and that his advice and counsel be taken seriously; expects the reform measures to allow open reporting of irregularity and fraud without risk of individual or institutional harassment as has occurred in the past;

23. Asks the Committee of the Regions to take the necessary measures to ensure that in future bona fide whistle-blowers do not receive the same treatment to which the Financial Controller was subjected;

24. Demands that the internal auditor receive a formal apology from the President and Secretary-General of the Committee of the Regions as soon as the proceedings initiated by the internal auditor pursuant to Article 24 of the Staff Regulations have come to a conclusion, and without prejudice to the outcome of those proceedings.

(1) OJ C 295, 28.11.2002, p. 1.

(2) OJ L 356, 31.12.1977, p. 1.

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

(4) OJ L 148, 16.6.2003, pp. 57 and 58.

(5) Undated letter from Mr Fabra Vallés to Sir Albert Bore received by the Committee of the Regions on 11 July 2003.

(6) OJ L 136, 31.5.1999, p. 1.

(7) This amount refers to 1998 and so does not fall under the scope of this discharge report.